Nigerian stocks extend losses to third consecutive trading session as profit taking rules

The negative trend in the equities market continued Wednesday as benchmark index lost value by 2.7 percent to close at 36,102.38 points. The bourse’s year-to-date gain further moderated to 34.3 percent, while market capitalization declined by N346.1 billion to settle at N12.4 trillion.

The market poor performance was influenced by negative sentiments towards DANGCEM (-4.9%) and GUARANTY (-4.7%). This is in addition to profit taking in NIGERIAN BREWERIES (-2.6%) and ZENITH (-3.3%).

Activity level on the exchange equally waned as volume and value traded dipped 42.6 percent and 6.4 percent to 224.8m units and N5.1 billion respectively.

Performance across sectors was bearish as all indices trended southwards.

The industrial goods index led losers, down 3.1 percent on account of sustained losses in DANGCEM (-4.9%) and WAPCO (-1.7%). The banking index followed suit, down 2.8 percent due to declines recorded in GUARANTY (-4.7%), ZENITH (-3.3%) and ACCESS (-5.0%).

In the same vein, consumer goods and oil & gas indices fell 1.0 percent apiece due to account of price depreciation in NIGERIAN BREWERIES (-2.6%), GUINNESS (-2.2%), TOTAL (-4.0%) and FORTE (-2.9%) respectively. Similarly, the insurance index marginally declined 0.1 percent owing to a drop in price of LINKASSURE (-1.3%).

As with general market performance, market breadth remained weak, as the ratio of advancers to decliners settled at 0.3x (same as Tuesday’s close of 0.3x) after 10 stocks gained against 30 losers. CILEASING (+5.2%), VITAFOAM (+4.4%) and UPL (+3.7%) led the gainers’ chart while ACCESS (-5.0%), FCMB (-5.0%) and STANBIC (-4.9%) were the worst performers.

Wednesday market activity equally saw GUARANTY TRUST BANK releasing its half-year earnings result, which showed the tier-1 bank growing gross earnings and profit after tax (PAT) by 2.0 percent and 16.6 percent to N214.1 billion and N83.7 billion respectively.

Analysts at Afrinvest say they expect market performance to remain driven by profit taking after the sustained rally in prior weeks. Nonetheless, they believe the current negative trend would be reversed on account of bargain hunting, saying they anticipate a rebound in the equities market in subsequent sessions this week.