Nigerian Equity Markets | 16 Nov 2015: Bears Claw Market Back as Sentiment Wanes … NSE ASI Down 107bps

Lagos, Nigeria, Capital Markets in Africa — The Nigerian equities market dipped into the red at the close of trade today, to erase the marginal gain recorded last Friday. The Benchmark Index –All Share Index- fell 1.1% to close at 28, 532.81points. The bears’ hold on the market further tightened as seen from the losses in bellwether Banking and Consumer Goods counters –  ZENITH (-4.8%), GUARANTY (-3.7%) and NIGERIAN BREWERIES (-2.1%) which drove the negative performance. A total of N106.2bn was also lost by investors today as market capitalization settled at N9.8tn. Activity level within the market also softened as volume and value traded depreciated 14.6% and 73.7% to 202.2m units and N1.1bn respectively.

The performance the of the various sectors was broadly mixed; the Oil & Gas and Insurance indices were the only gaining sectors as each appreciated 0.2% buoyed by gains in SEPLAT (+1.3%) and CONTINSURE (+2.9%). On the flipside, the Banking Index depreciated the most losing 3.4% due to heavy sell offs in ZENITH (-4.8%) and GUARANTY (-3.7%). In the same vein, the Consumer Goods and the Industrial Goods indices fell 0.9% and 0.3% respectively following losses in DANGCEM (-0.6%) and NIGERIAN BREWERIES (-2.1%).

Investor sentiments towards the Bourse worsened today given a market breadth of 0.4x (from 1.3x on Friday) consequent on 10 stocks advancing against 25 declining stocks. From the few gainers today, FBNH (+8.3%), NPFMCFBK (+4.1%) and UNITY BANK (+3.4%) advanced the most, while STANBIC (-5.0%), ETRANZACT (-4.9%) and ZENITH BANK (-4.8%) declined the most. Although the current market trend has seen some stocks fall to attractive technical positioning for bargain hunters, the impact of the weakening fundamentals of the economy on depressed earnings of companies will continue to douse fundamental investors’ appetite for equities. We maintain that investors with a short holding period trade cautiously.

Source: Afrinvest (West Africa) Limited Research Team