Nigeria Market Watch | May 12th 2015: Nigerian Equity All Share Index pares 66bps

Lagos, Nigeria (Capital Markets in Africa):- There is no respite yet for Nigerian Equities as the market extended its losing streak with the benchmark index shedding 66bps today to close at 34,115.49 points. Consequently, Month-to-date performance inched further southwards to 1.7%. The extended bearish run remained hinged on the bleak macroeconomic picture dampening sentiment for equities, most especially in relation to the policy direction of the incoming administration. Against this backdrop, investors further took profit in ETI (-9.7%) and NIGERIAN BREWERIES (-2.1%), while there was a general sell-off in downstream Oil and Gas stocks — OANDO (-4.4%), FORTE OIL (-2.9%) and TOTAL (-4.9%). However, market activity surged as sell-off deepened. Hence, volume and value traded rose 153.7% and 39.2% to 529.9 units and N3.3bn.

Oil and Gas Index leads Losses amidst Rout in Downstream Oil Counters
The Oil and Gas sector index shed 2.0%, leading sector losers as controversy over subsidy payment persists. TOTAL (-4.9%), OANDO (-4.4%) and FORTE OIL (-2.9%) led losses within the sector. Similarly, investors profit taking in ETI (-9.7%) resulted in a 1.1% decline in the Banking index. The Consumer Goods index erased yesterdays’ gains, paring 0.9% on profit taking in the sector bellwether — NIGERIAN BREWERIES (-2.1%). On the flip side, the Insurance index rebounded, up 1.5% due to rally in MANSARD (+4.7%) and CONTINSURE (+3.2%) while the Industrial Goods index closed flat.

Market Breadth Swings Negative
Market Breadth measured by Advancers/Decliners Ratio closed negative at 0.7x (18 gainers and 26 decliners). JBERGER, FIDELITY and CONOIL shed 5.0% each to top advancers while ETI (-9.7%), PORTLAND PAINTS (-5.0%) and RT BRISCOE (-5.0%) led the laggards. Trading activities within the short term is expected to remain choppy due to the prevailing level of uncertainty in the economy. Nevertheless, we expect likely bargain hunting positioning to result in a mild pull-back in the session ahead.

Source: Afrinvest (West Africa) Limited Research Team.