Nigerian Equity Markets | 03 Nov 2015: OANDO Appreciates 8.7% after 7 Days of Decline …NSE ASI Wanes 29bps

Lagos, Nigeria, Capital Markets in Africa — Sell pressure on the Nigerian bourse was sustained during trade today as the broader index closed 0.3% lower to settle at 29,052.87pts; thereby pushing YTD return (-16.2%) further into the negative territory. Market capitalization equally fell N28.9bn to N10.0tn. However, the decline in performance was majorly due to depreciations in Banking counters – GUARANTY (-2.3%) and ETI (-3.7%). Market activities — a measure of volume and value of shares traded –declined 45.9% to 166.8m units for volume and 62.1% to N1.1bn for value. 

With the exception of the Oil & Gas index which turned positive after 7 consecutive days of losses and Industrial Goods sector which gained 0.5% and 0.3% respectively, other sector indices closed lower. The upturn in the Oil & Gas sector was mainly due to the 8.7% rise in OANDO after its continued decline following the release of its unimpressive FY:2014, Q1:2015, Q2:2015 and Q3:2015 results while the gain in the Industrial Goods sector was on account gains in DANGOTE CEMENT (+0.6%). Conversely, leading the pack of sector decliners was the Banking index that shed 1.8% attributable to losses in GUARANTY (-2.3%), ETI (-3.7%) and ZENITH (-1.1%). The Insurance sector also shrank 0.3% against the negative performance of CUSTODIAN (-2.4%) and CONTINSURE (-3.0%). The Consumer Goods sector also closed 0.2% lower.

Investor sentiments remain poor as market breadth stayed negative at 0.5x after 14 stocks topped by LEARN AFRICA (+9.2%), OANDO (+8.7%) and GUINNESS (+5.0%) advanced against the 28 declining stocks led by IKEJA HOTEL, UNILEVER and CADBURY which lost 5.0% a piece. On the back of a prolonged period of downturn in the Nigerian equities market, we expect a market correction in the near term as we envision bargain hunters who would take advantage of current cheap valuations to a position in the stock with attractive upsides.      

Source: Afrinvest (West Africa) Limited Research Team