Nigerian Equities Pare Gains on Bearish Sentiment on Large Cap Stocks …NSE ASI down 5bps

LAGOS (Capital Markets in Africa) -The equities market halted two consecutive days of gains on account of negative sentiment towards bellwether Banking and Consumer Goods counters – ZENITH (-3.5%), NIGERIAN BREWERIES (-1.4%) and 7UP (-5.0%). The Benchmark index settled at 26,217.54 points, down a marginal 5bps while market capitalization declined N4.8bn to close at N9.0tn. Accordingly, YTD return remained at -2.4%. However, market activity was mixed as volume traded dropped 17.9% to 187.7m units and value traded surged 304.3% to N10.4bn with activities mostly concentrated in the Oil & Gas sector.

Banking Index Tops Sector Losers
The Banking index, which had outperformed other sector indices for the most part of the year,  dipped 1.1% today as investors booked profit in ZENITH (-3.5%) and UBA (-1.2%). The Insurance index (-0.3%) also closed in the red on account of declines in CUSTODYINS (-5.0%) and AIICO (-3.3%). On the bright side, the Oil & Gas index led sector gainers, up 1.2% on the back of price appreciation in SEPLAT(+4.1%) and FO (+0.2%) while the Consumer Goods index trailed with a +0.3% performance due to bargain hunting in NESTLE (+4.0%) and HONYFLOUR (+2.5%). Similarly, Industrial Goods index gained 0.1% as CCNN (+5.0%) rallied.

Investor Sentiment Weakens
Market breadth closed at 0.5x (from 1.3x on Monday). Thus, investor sentiment weakened today as 13 stocks advanced against 25 which declined. The best performing stocks today were CCNN (+5.0%),UACN (+5.0%) and NPFMCRFBK (+4.7%) while 7UP (-5.0%), CUSTODYINS (-5.0%) and NCR NIGERIA(-4.9%) were the worst performers. The loss recorded today as well as weak sentiment indicates profit-taking activities in the market. As sentiment remains driven by uncertain macroeconomic variables, we urge retail investors with a short-term perspective to stay cautious, while longer-term investors might take advantage of current cheap market valuation to position in equities with significant upsides. We expect the market to trade sideways in subsequent trading sessions.

Source: Afrinvestor Research Nigeria