Nigerian Equity Markets | 18 Nov 2015: How Much Lower and When to Stop? …NSE ASI down 47bps

Lagos, Nigeria, Capital Markets in Africa — The bears’ hold on the Nigerian bourse was tightened today as the All Share Index trended further southwards, losing 0.5% to settle at 28, 219.44 points, an 11-week low. The poor performance of the market today was broadly driven by the persistent sell-offs in NIGERIAN BREWERIES (-1.5%) as well as losses in FORTE OIL (-5.0%) and STANBIC (-4.9%). Capitalization in the market also depreciated N45.3bn to berth at N9.7tn. Market activity level was also mixed today as volume traded appreciated 10.5% to 143.7m units while value traded fell 42.1% to N1.5bn.

Performance across the sectors was mixed today after all sectors declined yesterday. The Banking and Insurance indices led sector gainers, rebounding 0.3% and 0.2% respectively against the backdrop of price appreciation in ZENITH (+1.5%) and NEM (+3.3%). The Industrial Goods index also closed marginally up 2bps. In contrast, the Oil & Gas index lost 2.5% due to losses sustained in FORTE OIL (-5.0%) and OANDO (-1.8%). Similarly, the continuous sell-offs in NIGERIAN BREWERIES (-1.5%) drove the Consumer Goods Index further southwards (-0.7%).

The persistent bearish sentiment of investors towards the Nigerian bourse was observed as 15 stocks advanced while 25 stocks declined to lead to a market breadth of 0.6x. The best performing stocks at the close of trade were BERGER (+4.9%), CAVERTON (+4.6%) and DIAMOND BANK (+3.6%), while DANGFLOUR (-5.5%), TRANSCORP (-5.3%) and FORTE OIL (-5.0%) declined the most. Investors’ — both foreign and domestic – confidence has been significantly dampened over the past two months due to the plethora of negative news flows on earnings and corporate governance. With the ASI already significantly below its support line at an RSI of 17.8 — indicating stocks are oversold — we expect to see some bargain hunters taking the position in subsequent trades; however, we maintain that investors with a short term horizon trade cautiously. 

Source: Afrinvest (West Africa) Limited Research Team