Nigeria Market Watch | June 8th 2015: Nigerian Equities Pullback into Negative Territory…NSE ASI Shed 22bps

Lagos, Nigeria (Capital Markets in Africa):- The Nigerian equity market continued exhibiting a sideways trading pattern as the market pulled back from last Friday’s strong close, shedding 22bps today to close at 33,590.48 points. This was against the backdrop of losses suffered by large caps across the Banking, Oil & Gas and Consumer Goods sectors — GUARANTY (-0.8%), ZENITH BANK (-0.9%), OANDO (-3.7%), NESTLE (-0.5%) and GUINNESS (-3.0%). Activity level however surged as aggregate volume and value traded rose 70.1% and 14.9% respectively.

The Oil and Gas Index declined 1.0% to lead losses as investors took profit in OANDO (-3.7%). The Consumer Goods index (-0.5%) trailed — pressured by weak performances of NESTLE (-0.5%) and GUINNESS (-3.0%) and FLOURMILL (-1.9%). Similarly, the Banking index also shed 0.3% as sector bellwethers witnessed selloffs. However, appetite for Industrial Goods counters remained strong having returned 0.3% this month. The sector index further rose 15bps, due to marginal gain in LAFARGE AFRICA (+0.5%).

Market Breadth closed negative today at 0.6x (15 Advancers’ vs 26 Decliners’) — signifying sentiment may remain weak in the session ahead. Topping list of gainers today were PZ (+5.0%), TRANSCORP (+4.9%), UBA (+3.5%), UBCAP (+2.9%) and LIVESTOCK (+2.2%); while NAHCO (-4.9%), TRANSEXPR (-4.7%), BETAGLAS (-4.5%), CILEASING (-4.3%) and HONYFLOUR (-4.3%) led market laggards. Against the backdrop of continued uncertainty about the economic direction of the newly elected government which has remained a drag on equity market performance, we anticipate that a sideways trading pattern may continue in the interim. That said, a strategy of holding value stocks may significantly minimize investors’ losses in the period of uncertainty.

Source: Afrinvest (West Africa) Limited Research Team