Profit taking in market Bellwethers drags NSE index

The local bourse closed lower this week from the previous week positive performance as profit taking in market bellwethers dragged the equities market on 3 of 5 trading days. Consequently, the All Share Index (ASI) dropped 2.4% W-o-W to settle at 32,124.94 points while YTD loss moderated to -16.0% and market capitalisation shed N285.6bn to N11.7tn.

The week started on a positive note as gains in DANGCEM and GUARANTY lifted the benchmark by 88bps on Monday. However by Tuesday, sell pressures on FBNH, ZENITH and SEPLAT reduced gains from Monday as ASI shed 8bps. This negative trend continued as elevated sell pressures on Wednesday and Thursday resulted to losses in DANGCEM , STANBIC, NIGERIAN BREWERIES, NESTLE and DANGSUGAR which further dragged the local bourse by 212bps and 142bps respectively. Although, buy interests in DANGCEM, ACCESS and ZENITH buoyed the ASI by 37bps on Friday, the index closed in the red at the end of week, down  2.4% W-o-W.

Performance across sectors was also bearish as all 5 indices under our coverage receded W-o-W. The Industrial index shed the most, down 4.1% W-o-W on the back of price depreciation in market bellwethers DANGCEM (-2.9%)  and WAPCO (-4.1%) . Similarly, the Consumer Goods and Oil & Gas indices shed 3.2% and 2.6% W-o-W respectively due to profit taking in NIGERIAN BREWERIES (-6.5%), NESTLE (-1.4%) and SEPLAT (-3.1%). The Insurance and Banking indices declined the least, down 2.4% and 0.4% W-o-W respectively due to sell-offs in CUSTODIAN (-7.4%), ZENITH (-1.9%), UBA (-1.2%) and FBNH (-15.0%).

Investor sentiment as measured by market breadth declined (advancers/decliners) softened to 0.3x from 0.7x in the previous week as 17 stocks advanced while 49 stocks declined. The best performing stocks for the week were PRESCO (+12.9%), NEIMETH (+11.1%) and AIRSERVI (+10.0%) while UNITYBNK (-21.1%), DANGFLOU (-21.1%) and CCNN (-18.8%) were the worst performing stocks. In the coming week, we expect a mild uptick in market performance as investors seek bargain hunting opportunities in fundamentally sound stocks while maintaining our bearish near-term.

Market Statistics Friday, 2nd November 2018

Market Cap (N’bn)                              11,728.1

Market Cap (US$’bn)                               38.3

NSE All-Share Index                        32,194.94

Daily Performance %                                0.4

Week Performance %                            (2.4)

YTD Performance %                            (16.0)

Daily Volume (Million)                          239.1

Daily Value (N’bn)                                   2.8

Daily Value (US$’m)                               9.3