Nigerian Equity Markets | 5 Dec 2016: Equities Close Flat despite Sustained Rally in Oil & Gas Stocks… NSE ASI up 1bp

LAGOS (Capital Markets in Africa) – The equities market closed flat today as a sustained rally in Oil & Gas stocks offset sell-offs in Industrial Goods and Banking equities. Consequently, the All Share Index gained a marginal 1bp to close at 25,743.03 points while market capitalisation added N758.6m to settle at N8.9tn; thus ensuring the rebound in equities which began last week after a prolonged period of intense sell pressure was sustained. The major buffers to the broadly neutral performance were FORTE (+10.2%), ZENITH (+2.3%) and NIGERIAN BREWERIES (+1.4%). Activity level was mixed as volume traded fell 69.6% to 175.1m units while value traded rose 133.2% to N3.1bn.

Mixed Performance across Sectors
Performance across sectors was also mixed as two indices appreciated while three declined. The Oil & Gas index chaired sector gainers, improving 3.6% on account of gains in TOTAL (+10.1%) and FORTE (+10.2%) while the Consumer Goods index trended 5bps northwards due to positive sentiment toward NIGERIAN BREWERIES (+1.4%). On the flipside, the Industrial Goods index depreciated the most, sliding 1.5% following sell-offs in WAPCO (-4.2%). The Insurance and Banking indices also followed suit, losing 1.2% and 0.5% respectively.

Sentiment Weakens
Bearish sentiment prevailed as market breadth stood at 0.7x – 15 stocks advanced against 23 decliners. The top gainers were FORTE (+10.2%), TOTAL (+10.2%) and OANDO (+7.8%) while GUINNESS (-9.7%), VITAFOAM (-5.0%) and REDSTAREX (-4.9%) declined the most. The weak sentiment amidst flattish performance of the broader index highlights investors’ apathy for equities despite attractive valuation. We expect this to continue until the “Santa rally” begins to usher in a new year as investment managers reposition portfolios.

Source: Afrinvest West Africa Research Team