Markets in Red as Investors Adopt Risk Off Strategy

–Week Ended May 18, 2018

Global Equities Market
Weeks after the US pulled out from the Joint Comprehensive Plan of Action (JCOPA), the Trump administration provided conditions for a renegotiation with Iran which the country has refused. This coupled with Venezuela’s plunging oil production is anticipated to have a positive knock on effect on oil prices in the near term and most importantly on markets of oil dependent countries.

Sustained Bearish Run Drags Benchmark Index to 4-Month Low

The local bourse sustained its negative performance for the sixth consecutive trading session dragging the All Share Index (ASI) 1.1% lower to close at 39,723.85 points – lowest since the 4th of January, 2018 - while YTD return plunged to 3.9%. Accordingly, investors lost N154.6bn in value as market capitalization fell to N14.4tn – lowest since 9th January, 2018. The bears had the day as investors booked profit in bellwethers – NIGERIAN BREWERIES (-5.0%), ZENITH (-3.4%) and GUARANTY (-1.6%).

SEC Tasks Investors on Investment Diversification to Mitigate Risk

The Securities and Exchange Commission (SEC) says there is the need for retail investors to diversify their investment portfolio in order to mitigate risk.

The SEC Acting Director-General, Ms Mary Uduk, stated this at one-day maiden National discourse organised by Pragmatic Shareholders Association of Nigeria (PSAN) in Lagos state, south west Nigeria.

Uduk said that investors must learn to invest in various asset classes to mitigate risks and exposure.

Bearish Run in Local Bourse Extends to 5th Consecutive Trading Session

The bearish performance of the domestic bourse continued for the fifth consecutive trading session as the All Share Index (ASI) declined 25bps to settle at 40,150.55 points while YTD return moderated to 5.0%. Consequently, investors lost N35.8bn as market capitalization fell to N14.5tn. Profit taking in ETI (-2.2%), NIGERIAN BREWERIES (-0.7%) and DANGSUGAR (-2.5%) were the major drags to today’s performance. Nonetheless, activity level was mixed as volume traded fell 4.8% to 266.7m units while value traded rose 14.3% to N4.7bn.

Equities Market Extends Bearish Run

The local bourse closed in the red for the fourth consecutive trading session as the NSE All Share Index (ASI) shed 43bps to settle at 40,249.29 points while YTD return fell to 5.2%. Accordingly, investors lost N63.7bn in value as market capitalization settled at N14.6tn. Today’s bearish performance was attributable to losses in DANGCEM (-0.4%), ETI (-2.4%) and DANGSUGAR (-3.7%). However, activity level strengthened as volume and value traded rose 3.2% and 77.6% to 280.1m units and N4.1bn respectively.

Banking Stocks Drag Equities Market Performance

The domestic bourse opened the trading week on a negative note following sell offs in Tier 1 banking stocks – GUARANTY (-1.1%) and ACCESS (-1.8%) as well as FBNH (-2.7%). Consequently, the NSE All Share Index shed 12bps to close at 40,425.07 points while YTD return declined to 5.7%. Investors lost N17.2bn in value as market capitalization fell to N14.6tn. Similarly, activity level weakened as volume and value traded dipped 22.6% and 54.6% to 271.2m units and N2.3bn respectively.

Equities Market Tends Southwards Following Dead Cat Bounce

The gains recorded in the benchmark index yesterday can be viewed as a "Dead Cat Bounce" as sustained profit taking in today's trading session dragged the NSE All Share Index (ASI) lower by 83bps to settle at 40,651.41 points while YTD return moderated to 6.3%. As a result, investors lost N123.7bn as market capitalization declined to 14.7tn. Activity level strengthened as volume and value traded rose 63.5% and 73.4% to 424.4m units and N7.6bn respectively.

Stock Market Rebounds

Bargain hunting in some bellwether stocks – DANGCEM (+2.7%), NIGERIAN BREWERIES (+2.3%), NESTLE (+1.7%) and UNILEVER (+4.9%) – ended the 2-day bearish run in the local bourse to push the All Share Index 93bps higher to 40,992.97 points while YTD return increased to 7.2%. Accordingly, investors gained N136.8bn as market capitalization rose to N14.8tn. Activity level, was mixed today as the volume traded rose 27.6% to 259.5m units while the value traded declined by 1.5% to N4.4bn.

Profit Taking Drags Market Performance Down

Sustained profit taking in yesterday's session dragged market performance for the fourth consecutive trading session as the All Share Index (ASI) slid 40bps to settle at 40,914.94 points while YTD return further weakened to 7.0%. Similarly, investors lost N59.8bn as market capitalisation stood at N14.8tn. The bearish performance was triggered by profit taking in bellwethers - DANGCEM (-1.2%), SEPLAT (-3.3%) and GUARANTY (-1.1%). However, activity level weakened as volume and value traded fell 28.2% and 56.1% to 244.9m units and N4.1bn respectively.