Nigerian Equity Markets | 29 Oct 2015: Nigerian Equities Sustains Losing Momentum… NSE ASI sheds 70bps

Lagos, Nigeria, Capital Markets in Africa — The Nigerian equity market has sustained its bearish momentum following weak earnings results and regulatory sanctions which have doused investors’ confidence, resulting into a further 70bps decline in the benchmark — All Share Index — to close at 29,189.22 points, whilst market capitalization shed N71.2bn to N10.0tn. Consequently, Month to Date and Year to Date closed southwards at -6.5% and -15.8%. The weakening in the benchmark equities indicators today was precipitated by profit taking in  DANGOTE CEMENT (-0.6%) and the sustained selling pressure in OANDO (-9.5%) and banking counters — GUARANTY (-2.0%) ZENITH (-1.8%) and UBA (-5.0%). However, market activity was mixed as the volume of stocks traded declined 35.6% to 248.9m units, whilst value traded rose 30.9% to N2.5bn.

Against the backdrop of the huge selling pressure in the market, all sector indices declined today save for the  Consumer Goods index which gained 3.0% – buoyed by the rally in NIGERIAN BREWERIES (+6.8%), DANGOTE SUGAR (+6.5%) and NESTLE (+0.7%). Meanwhile, investors’ appetite for banking stocks remains weak as the index declined 1.2% today to lead sector decliners for the third session. This was on the back of price depreciation in GUARANTY (-2.0%), ZENITH (-1.8%), UBA (-5.0%), DIAMOND (-4.1%) and ACCESS (-1.0%). The Oil & Gas index declined 1.2% – majorly due to sustained selloff in OANDO (-9.5%), whilst the profit taking in DANGOTE CEMENT (-0.6%) weighted in on the Industrial Goods index which shed 0.3%. The Insurance index closed flat.

Market sentiment measured by its Breadth (the Advancers’ vs. Decliners’ ratio) stayed negative today at 0.4x — 12 gainers and 27 losers’. NIGERIAN BREWERIES (+6.8%), DANGOTE SUGAR (+6.5%) and FIDSON (+4.8%) led the 7 gainers whilst UACN (-9.6%), OANDO (-9.5%) and UAC PROPERTIES (-9.3%) led laggards. Active short-term traders may take advantage of the bargain opportunities in the session ahead as the benchmark index broke its 6 months support line today.

Nevertheless, we do not see any fundamental short term driver of equities in the interim; hence continue to urge caution on the part of retail investors with short-term investment horizon.

Source: Afrinvest (West Africa) Limited Research Team