Nigerian equities confirm analysts’ calls, start week on negative note as market index down 1.0%

The Nigerian equities market confirmed analysts’ call Monday as it started on a negative note, shedding 1.05 percent of its benchmark index. Analysts prior to trading had projected that profit taking may rule in the early trading sessions this week, thereby allowing the bears to take centre stage.

“Whilst we reckon that the performance of the equities market will remain largely driven by the positive macroeconomic developments in the past three months, we do not eliminate the possibility of some profit taking in the early trading sessions this week,” analysts at Afrinvest had said before trading Monday.

The market indeed confirmed the projection as it extended losses to the 2nd consecutive session with the all-share index (ASI) falling 1.05 percent to close at 32,769.82 points, while year-to-date (YTD) gain moderated to 21.9 percent.

Consequently, equity prices lost N120.2 billion as market capitalization declined to N11.3 trillion. Monday’s performance was dictated by losses in market bellwethers such as DANGCEM (-0.9 percent), GUARANTY (-1.1 percent) and ZENITH (-1.8 percent). Also, market activity declined as volume and value traded fell 53.1 percent and 54.7 percent to settle at 162.3 million units and N1.5 billion respectively.

Sector performance was largely bearish as all indices closed in the red save for the insurance index, up 0.3 percent due to bargain hunting in AIICO (+3.3%) and MANSARD (+0.9 percent). The oil & gas index led the losers’ chart, down 1.8 percent on account of MOBIL (-5.0 percent), TOTAL (-5.0 percent) and CONOIL (-4.9 percent).

The banking index lost 1.1 percent as a result of declines in GUARANTY (-1.1 percent) and ZENITH (-1.8 percent).

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Similarly, the industrial goods index was down 0.6 percent, dragged by DANGCEM (-1.5 percent), while losses in GUINNESS (-4.9 percent) and 7UP (-9.5 percent) ensured the consumer goods index closed 0.3 percent lower.

Market sentiment remained weak as market breadth was unchanged at 0.5x – 17 stocks advanced against 29 that declined.

The best performing stocks were HONEYWELL (+9.7 percent), PZ (+6.2 percent) and CUTIX (+5.0 percent) while MAYBAKER (-9.5 percent), UNITY
(-8.9 percent) and PRESCO (-6.9 percent) were the worst performers.

Today’s negative close is premised on profit taking in counters that had gained in prior sessions. Nevertheless, we anticipate a rebound in subsequent sessions given the positive macroeconomic developments that investors have continued to ride on over the last three months.

In the NASD OTC exchange, three counters traded with total volume and value of transactions closing at 82,600 units and N433,595.0 respectively. AFRILAND (+10.0%), CSCS (+9.9%) closed in the green while AIRLIQ closed the day flat.