Nigerian stocks fall as investors weigh options on political risks

The Nigerian stock market Thursday extended its bearish performance to the second consecutive trading session as profit taking in NESTLE (-4.2%), GUARANTY (-2.1%) and UBN (-3.8%) pulled the benchmark index down 61bps to settle at 32,763.35 points.

This is just as analysts say the development may not be unconnected with political risks, as preparations by the dominant parties towards the forthcoming elections have hardly given assurance to bolster confidence.

To this end investors are said to be weighing options ahead of the 2019 general elections, which is less than five months away.

Following the lackluster performance on the day, market capitalisation declined by N73.0 billion to N12.0 trillion while year-to-date (YTD) loss worsened to -14.3 percent. Activity level was however mixed as volume traded fell 10.4 percent to 154.3 million units while value traded rose 33.0 percent to N2.7 billion. FIDELITY (23.3m units), GUARANTY (16.8m units) and UBA (16.2m units) were the top traded stocks by volume while the top traded stocks by value were NESTLE (N1.3bn), GUARANTY (N621.4m) and ZENITH (N246.2m).

Specifically, performance across sectors was largely bearish as three of five major indices trended downwards. The consumer goods index led decliners, down 1.5 percent following profit taking in NESTLE (-4.2%), DANGSUGAR (-2.7%) and PZ (-4.8%).

Similarly, the banking and industrial goods indices lost 1.0 percent and 0.1 percent respectively on the back of sell pressures in GUARANTY (-2.1%), UBN (-3.8%) and CCNN (-2.1%).

On the flip-side, the Insurance index gained 0.4%, following investors’ bargain hunting in CUSTODIAN (+4.8%) and LINKASSURE (+9.4%) while the oil & gas index climbed 0.1 percent due to buy interest in TOTAL (+1.1%).

Particularly, investor sentiment as measured by market breadth (advance/decline ratio) weakened as 13 stocks gained compared to 21 stocks that declined.

Outperforming stocks on the day were FIRSTALUM (+10.0%), ROYALEX (+10.00%) and LINKASSURE (+9.4%) while the laggards were ABCTRANS (-9.1%), PZ (-4.8%) and HONYFLOUR (-4.8%).