The gain recorded in the Nigerian equities market yesterday, can be viewed as a “dead cat bounce" as the benchmark index continued on its downward trend today. The All Share Index shed 1.0% to settle at 38,534.64 points while YTD return retreated to 43.4%. Accordingly, market capitalization fell by N135.8bn to N13.4tn. Price depreciations in large cap stocks - GUARANTY (-4.8%), ZENITH (-3.9%), NIGERIAN BREWERIES (-2.6%) and DANGCEM (-0.5%) were the major drags to market performance. Similarly, activity level waned as volume and value traded declined 30.0% and 83.6% to 323.9m units and N4.4bn respectively.
Oil & Gas Index Emerges Lone Gainer
Sector performance was largely bearish as all indices save for the Oil & Gas index which appreciated 0.1% following gains in MOBIL (+0.9%), closed in the red. The Banking index depreciated the most, down 2.2% on the back of losses in GUARANTY (-4.8%) and ZENITH (-3.9%). The Industrial Goods index trailed, falling 1.7% as investors took profit in DANGCEM (-0.5%) and WAPCO (-4.3%). Similarly, price depreciations in NIGERIAN BREWERIES (-2.6%) and CADBURY (-5.0%) dragged the Consumer Goods index 0.5% lower. In the same vein, the Insurance index trended 0.1% southwards due to losses in LINKASSURE (-3.2%).
Market Breadth Wanes
Market breadth (advancers/decliners ratio)– which measures investor sentiment – weakened to 0.8x from 0.9x recorded yesterday, as 19 stocks advanced against 24 stocks that declined. The top performers for the day were BERGER (+4.9%), FCMB (+4.9%) and DANGFLOUR (+4.9%) while PRESCO (-5.0%), CADBURY (-5.0%) and GUARANTY (-4.8%) were the worst performers. Today’s market performance can be largely attributed to sustained profit taking in large cap stocks. However, we expect a kickback in subsequent trading sessions in anticipation of the usual year-end rally.