Nigeria Equity Watch | 2 Sep 2015: Nigerian Market Sinks on Profit Taking … NSE ASI falls 1.2%

Lagos, Nigeria, Capital Markets in Africa — The Nigerian All Share Index took a negative turn today, down 1.2% to close at 29,870.86pts after a 4-day rally. The decline in the broader index was consequent on losses recorded in sector bellwethers — GUARANTY (-3.4%), NIGERIAN BREWERIES (- 1.7%) and OANDO (-5.0%). Similarly, market activities measured by volume and value of shares traded waned 53.1% to 439.7m units and 39.4% to N4.5tn respectively.

After posting gains in the last 2 trading days, all sector indices closed southwards today. The Oil & Gas index recorded the highest decline, closing 4.0% lower on account of losses in FORTE OIL, SEPLAT and OANDO that waned 5.0% apiece. Also, the banking sector index closed 1.7% lower due to depreciations in GUARANTY (-3.4%), ETI (-2.3%) and FBNH (-2.4%). Equally, the Consumer Goods, Industrial Goods and Insurance indices also declined 1.1%, 1.0% and 11bps respectively.

Investors sentiment falters again as market breadth (measured by ratio of advancers to decliners) closed at 0.3x as 12 stocks led by CUTIX (+9.9%), BERGER (+5.0%) and IKEJA HOTEL (+4.7%) advanced against 37 declining stocks. DANGSUGAR (-9.2%), UACN (-5.0%) and SEPLAT (-5.0%) topped the losers’ chart. After the bargain hunting activities that lifted the broader index in previous sessions, we believe today’s performance was broadly driven by profit taking, signalling sustained softness of investment confidence in the Nigerian market. Consequently, we restate our advice that investors should be wary of speculation but maintain a medium to long term position in equities.

Source: Afrinvest (West Africa) Limited Research Team