Profit taking in large caps pull down Nigerian stocks index 0.88%

Equities trading on the floor of the Nigerian Stock Exchange (NSE) Monday ended negative, depressing the all-share index (ASI) by 0.88 percent to close at 38,913.99 points in contrast to 0.70 percent depreciation recorded in the previous transaction last Friday.

Similarly, market capitalization downsized to close at N13.53 trillion just as year-to-date gain retreated to 44.8 percent.

Market breadth equally closed in favour of the bears with a total of 28 price losers to 14 price gainers. Top performing stocks were MOBIL (+9.5%), NASCON (+5.0) and NEIMETH (+4.3%) while UBA (-5.0%), LEARNAFRCA (-5.0%) and CILEASING (-4.9%) were the worst performers.

Also reflecting the bearish climate, market turnover dropped by 33.86 percent as against 49.99 percent decline in the previous session last weekend.

Market activity level declined as average volume and value fell 33.9 percent and 4.0 percent to 350.6 million units and N4.9 billion respectively. The financial services sector led the activities chart with FBNH, Zenith Bank Plc and Diamond Bank Plc. emerging the most active to boost market turnover.

Specifically, the day’s development was in line with analysts call earlier that profit taking would rule the market in early sessions. In fact market performance on the day could be largely attributed to profit taking in bellwether industrial goods and banking stocks – DANGCEM (-1.7%), ZENITH (-3.3%) and UBA (-5.0%).

Investors who must have benefitted from the positive rally of the market that fizzled out at the close of the previous week seem still in the process of harvesting their gains, hence, the fall in ASI.

Nigeria’s 2018 budget seen not a fiscal stimulus for growth as experts explore prospects

Similar to the broader index, sector performance was largely underwhelming as three of five indices closed southwards.

The banking index led laggards, down 2.0 percent on the back of losses in ZENITH (-3.3%), UBA (- 5.0%) and GUARANTY (-0.8%). The industrial goods index trailed, depreciating 1.4 percent due primarily on profit taking in DANGCEM (-1.7%) and WAPCO (-1.2%).

Similarly, selling pressures on NEM (-3.9%) and LINKASSURE (-4.4%) dragged the Insurance index 1.1% lower. On the flip side, the Oil & Gas and Consumer Goods indices gained 1.1% and 0.7% respectively as MOBIL (+9.5%), TOTAL (+0.9%), NESTLE (+3.5%) and FLOURMILL (+6.4%) enjoyed buy interest.

However analysts expect market activities would stabilize in succeeding trading days.

“In line with our expectation, market performance was negative as investors booked profit in large-cap stocks, which rallied the previous week. Nonetheless, we maintain a positive outlook in the near term as fund managers return to strategic weightings during year-end rebalancing cycle,” analysts at Afrinvest said.