Sell-offs hit Nigerian blue chips as market year-to-date loss worsens to 15%

Continued sell-offs in Nigerian blue chips Wednesday worsened market year-to-date loss to 15 percent as investors weigh investment options on political development in the country.

Analysts who spoke to business a.m. say the bearish sentiments would linger till after the 2019 elections, which comes at the end of the first quarter of the year.

Specifically, Wednesday’s trading session saw sell-offs in blue chips such as DANGCEM (-2.4%), NIGERIAN BREWERIES (-2.7%) and UNILEVER (-2.2%), which weighed on performance as the All Share Index (ASI) shed 0.79 percent to 32,454.03 points.

 Consequently, market capitalization decreased by N94.1 billion to N11.9 trillion just as activity level waned as volume and value traded fell 25.9 percent and 57.7 percent to 136.7 million units and N1.4 billion respectively.

FCMB (38.4m units) UBA (20.8m units) and FIDELITY (19.1m units) led the top traded stocks by volume while NESTLE (N400.0m), DANGCEM (N185.2m) and UBA (N172.5m) were the top traded stocks by value.

Three of five sector indices declined, one appreciated and one closed flat. Leading Wednesday’s laggards was the industrial goods index, which shed 1.3 percent due to sell-offs in DANGCEM (-2.4%).

The consumer goods index followed suit, down 0.6 percent as NIGERIAN BREWERIES (-2.7%) and UNILEVER (-2.2%) recorded losses. In the same vein, the insurance index lost 0.5 percent as NIGERINS (-0.6%) and AIICO (-0.6%) witnessed sell pressures.

On the flip side, the banking index emerged lone gainer, up 0.4 percent as investors sought bargains in ZENITH (+1.4%) and GUARANTY (+0.6%) while the Oil & Gas index closed the day flat.

Investor sentiment measured by market breadth (advance/decline ratio) improved to 1.1x from 0.9x recorded yesterday as 15 tickers gained while 14 declined. The top performers were DIAMOND (+5.1%), CUTIX (+4.9%) and DANGSUGAR (+4.3%) while NIGERINS (-8.8%), MBENEFIT (-7.1%) and SOVERNINS (-4.4%) were the worst performing stocks.

United capital analysts are of the opinion that the current market condition presents an opportunity for discerning investors to lock in funds at cheap valuation prices over the election cycle in Q1-2019.

Afrinvest analysts said they expect a rebound by the end of the week due to an anticipated bargain hunting in bellwethers that have declined in the last two trading sessions.