Selling Pressure Remains at the Bourse

Photo L-R: Tinuade Awe, General Counsel & Head, Listing and Regulatory Division, The Nigerian Stock Exchange (NSE); Haruna Jalo-Waziri, Executive Director, NSE’s Capital Markets Division; Oscar Onyema, NSE’s CEO); Andrea Bernaldo de Quiros, Country Manager Nigeria, The Business Year magazine; and Ade Bajomo, Executive Director, NSE’s Market Operations and Technology, at the presentation of the “Most Innovative Stock Exchange in Africa Award 2016” to NSE in Lagos.

The Nigerian capital market opened the week on a bearish note as huge sell offs in bellwethers across sectors - NIGERIAN BREWERIES (-3.1%), FORTE (-5.0%) and ZENITH (-2.0%) - dragged the benchmark index 0.8% lower to settle at a month low of 27,634.99 points. As a result, YTD loss worsened significantly to 3.5%. Investors in turn lost N77.6bn as market capitalization declined to N9.5tn. Activity level in the market was mixed as volume traded improved 15.8% while value traded declined 49.2% to close at 255.8m units and N778.4m respectively.

Insurance Index Lone Advancer
Performance across sectors was bearish as all indices closed in red save for Insurance index, up 0.1% on account of gains in WAPIC (+4.0%). The Oil & Gas index declined the most on the back of losses in FORTE (-5.0%) and OANDO (-3.2%). Consumer Goods index followed as it weakened 1.6% as a result of sell offs in NIGERIAN BREWERIES (-3.1%) and CADBURY (-5.0%). Similarly, the Banking and Industrial Goods indices waned 0.9% and 0.1% respectively, dragged by negative sentiments in ZENITH (-2.0%), ETI (-3.1%) and WAPCO (-0.3%) respectively.

Sentiment Remains Weak As Investors Anticipate Earnings Result
Investor sentiment deteriorated significantly today as reflected in the breadth which settled at 0.3x (7 advancing stocks against 24 decliners) relative to previous market breadth of 1.5x. The best performing stocks today were WEMABANK (+6.5%), WAPIC (+4.0%) and FCMB (+2.7%), while NAHCO (-7.6%), FORTE (-5.0%) and CADBURY (-5.0%) were the worst performers. We believe performance will be influenced this week by investors’ anticipation of more Q3:2016 earnings yet to be submitted. With the tepid level of activity amidst weaker sentiment, we expect investors’ interest in equities to remain lacklustre in subsequent sessions.