Nigerian Equity Markets | 27 Oct 2015: Equities Extend Losses into 5th Trading Session… ASI Dips 86bps

Lagos, Nigeria, Capital Markets in Africa — The Nigerian equities market extended losses into the fifth trading session as the All Share Index (ASI) declined 0.9% to close at 29,572.90 whilst market capitalization shed N88.0bn to close at N10.2tn. Today’s decline in the benchmark index followed sustained selling pressure in OANDO (-9.7%), blue-chip Banking counters — GUARANTY (-2.9%), STANBIC (-5.0%), FBN HOLDINGS (-4.9%), ZENITH (-1.7%) and UBA (-4.8%) — and Consumer Goods equities – GUINNESS (-5.0%) and UNILEVER (-5.0%). Market activity also softened as aggregate volume and value of equities traded waned 61.5% and 74.0% to 141.3m units and N1.4bn respectively.

Sector indices performance was broadly mixed with the Banking Index sliding 1.9% to lead decliners due to further sell-down in GUARANTY (-2.9%), STANBIC (-5.0%), FBN HOLDINGS (-4.9%), ZENITH (-1.7%) and UBA (-4.8%). Sentiment has been weak on banking stocks following regulatory sanctions on UBA, FBN HOLDINGS and STANBIC (disputed) as well as the weak 9 months earnings released DIAMOND (-1.4%) and FBN HOLDINGS. Similarly, Oil & Gas index declined 1.4% – pressured by sustained sell-off in OANDO (-9.7%). The Consumer Goods index also waned 0.8% against the backdrop of weakened investor appetites for GUINNESS (-5.0%) and UNILEVER (-5.0%). On the flipside, the Insurance index rebounded 1.2% today due to bargain hunting in MANSARD (+4.7%) whilst the Industrial Goods index added 22bps — buoyed by gains in DANGOTE CEMENT (+0.3%) and CCNN (+3.6%).

Sentiment for equities measured by market breadth (Advancers”/Decliners’ ratio) remains negative at 0.4x — 14 advancers’ vs 34 decliners’. Top gainers today include MAY&BAKER (+4.9%), MANSARD (+4.7%), IKEJAHOTEL (+4.1%); whilst OANDO (-9.7%), LIVESTOCK (-9.4%), GUINNESS (-5.0%) led laggards. Given the string of losses recorded in the bourse on the back of lackluster earnings result by some quoted companies and the strings of bad news in the market, we anticipate that technical traders may position in some counters as the ASI has fallen below its 6-month support line. However, we still expect further sell-down pressure in OANDO and Banking stocks. 

Source: Afrinvest (West Africa) Limited Research Team