Nigeria Market Watch | June 9th 2015: Bearish Momentum for Equities Sustained… NSE ASI sheds 29bps

Lagos, Nigeria (Capital Markets in Africa):- Investors’ sentiment on the Nigerian bourse remained weak today as equities slipped further into the negative territory. The All Share Index (ASI) trended south, closing 29bps weaker at 33,492.17 points, hence bringing cumulative losses in June to 2.4%. This followed extended selloffs recorded in Banking and Oil and Gas stocks — GUARANTY (-1.3%), FBN HOLDING (-1.7%), UBA (-2.4%), FORTE OIL (-0.8%) and OANDO (-1.2%). Similarly, market capitalization shed N33.5bn to close at N11.4tn. In the same vein, market activity slowed as volume and value traded declined 33.0% and 3.1% to 226.2m and N2.7bn respectively.

All sector indices save for the Industrial Goods index closed southwards. The Oil and Gas index led losses, shedding 84bps on account of declines in FORTE OIL (-0.8%) and OANDO (-1.2%); while the Insurance index trailed, paring 0.8% as weak sentiment for AIICO (-5.0%) and MANSARD (-2.4%) weighed on the sector performance. Banking index further declined 0.6% on the back of depreciation in share prices of GUARANTY (-1.3%) and FBNH (-1.7%) whilst the Consumer Goods index also declined 0.2%. However, a 3bps appreciation in Dangote Cement ensured the Industrial Goods index (+0.1%) ended the only advancing index.

Market Breadth measured by Advancers/Decliners ratio closed at 0.4x (14 Advancers vs 26 Decliners) as sentiment for equities remained soft. NASCON (+10.1%), OKOMU OIL (+5.0%), WEMA BANK (+4.0%), BERGER PAINTS (+3.9%) and WAPIC (+3.8%) closed as the top gainers whilst AIICO (-5.0%), NEIMETH (-4.7%), VONO (-4.6%), AIR SERVICE (-4.3%) and RT BRISCOE (-4.1%) were the top declining stocks. As sentiment remained weak on short term prevailing economic uncertainty, we advise investors with short term horizon to limit exposure to value stocks in order to preserve value. Nonetheless, investors with medium to long term investment horizon may take advantage of the current cheap valuations of growth stocks.