Nigerian Equity Markets | 28 Oct 2015: Bearish Run Continues on Nigerian Equity Markets…. ASI declines 60bps

Lagos, Nigeria, Capital Markets in Africa — The Nigerian stock market sustained its bearish run into the 6^th trading session as the benchmark equities index – All Share Index (ASI) dipped 60bps to close at 29,396.31pts, bringing WTD, MTD and YTD returns to -2.1%, -5.8% and -15.2% respectively. Similarly, market capitalization shed N60.7bn to N10.1tn. The sustained losing streak in the bourse was against the backdrop of continued selling pressure in OANDO (-9.6%) and STANBIC (-7.5%) as well as depreciation in share prices of blue-chip counters across the banking, consumer and industrial goods sectors — FBN HOLDINGS (-4.9%), ZENITH (-1.4%), UBA (-4.8%), GUINNESS (-5.0%) and WAPCO (-2.2%). Market activity, however, strengthened as aggregate volume and value traded increased 173.4% and 40.5% to 386.3m units and N1.9bn respectively.

All sector indices closed southwards today, save for the Insurance Index which gained a marginal 0.1% on appreciation in the share prices of NEM INSURANCE (-2.9%). On the flipside, investors’ appetite for banking counters remains weak despite the modest earnings results released by some Tier-2 banks yesterday and today (SKYE, UNION and STERLING) as the Banking Index slid 1.1% to record the weakest sector performance for the second day. This was on the back of sell down pressure across both Tiers of banks – ZENITH (-1.4%), UBA (-4.8%), ACCESS (-2.4%) and DIAMOND (-5.0%). The Oil & Gas index (-1.0%) followed, – pressured by sustained selling pressure in OANDO (-9.6%); whilst the Industrial and Consumer Goods indices declined 0.6% and 0.5% respectively against the backdrop of waning investors sentiment for WAPCO (-2.2%) and GUINNESS (-5.0%).

Sentiment remained weak as market breadth (advancers’ vs decliners’ ratio) waned to 0.3x (11 advancers’ vs 33 decliners’). Top gainers include ASHAKACEM (+4.1%), LIVESTOCK (+3.9%), FIDSON (+3.3%) whilst OANDO (-9.6%), STANBIC (-7.5%) and TRANSEXP (-7.4%). The declining market breadth suggests selling pressure may persist in the short term. The weak earnings result by bellwether stocks (in the banking, consumer goods and oil & gas sectors) and regulatory sanctions placed on some banks seem to have weakened the confidence of domestic investors’, whilst domestic FX uncertainty has also kept foreign investors on the sideline. Despite the bargain hunting opportunity evident in the market, we urge short term investors to remain cautious as we do not anticipate any short-term drivers of equities. 

Source: Afrinvest (West Africa) Limited Research Team