Nigerian stocks decline further on profit taking as benchmark index goes down 0.21%

Nigeria stocks declined further Monday as the bears continued their dominance with benchmark index, the NSEASI sliding 21 basis points (bps) to 41,845.92 points while year-to-date (YTD) return contracted to 9.4 percent.

Consequently, market capitalization pared N32.2 billion to settle at N14.9 trillion.

The bearish performance of the market today was primarily due to profit taking in large-cap stocks – NIGERIAN BREWERIES (-3.4%), ETI (-4.8%) and STANBIC (-2.0%). Similarly, activity level declined as volume and value of shares traded fell 23.4 percent and 25.9 percent to 326.9 million units and N5.3 billion respectively.

The top traded stocks by volume were ZENITH (128.9m), FBNH (23.8m) and FIDELITY (16.7m) while ZENITH (N3.5bn), GUARANTY (N0.4bn) and FBNH (N0.3bn) were the top traded stocks by value.

Sector performance was largely bearish as four of five indices under our coverage closed in the red. The industrial goods index was the lone gainer, up 0.5 percent largely due to buying interest in DANGCEM (+0.4%).

On the flipside, the insurance index was the biggest loser, down 2.8 percent following sell-offs in CONTINSURE (-4.7%) and WAPIC (-5.0%). The banking index trailed, shedding 2.1 percent on account of price depreciation in ETI (-4.8%).

Likewise, the consumer goods and oil & gas indices fell 1.8 percent and 0.6 percent respectively as investors booked profit in NIGERIAN BREWERIES (-3.4%), DANGFLOUR (-4.8%) and TOTAL (-5.7%).

Investor sentiment, measured by market breadth (advance/decline ratio) stayed flat at 0.4x as 14 stocks advanced while 34 stocks declined. The best performing stocks were CILEASING (+9.9%), UCAP (+5.6%) and NEM (+4.8%) while the worst performers were CADBURY (-9.6%), NIGERINS (-9.5%) and UNITY (-8.9%).

Despite the largely positive corporate earnings already released, market performance has remained negative. However, analysts envisage bargain-hunting opportunities in the near term as relative strength index (RSI) of the ASI, which currently stands at 38.9 is closer to the oversold region.