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Monday, August 8, 2022

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Equities Market Opens H2:2018 in the Red… NSE ASI down 0.9%

Profit taking in market bellwethers dragged the performance of the local bourse yesterday as the NSE All Share Index (ASI) fell 0.9% to close at 37,946.92 points while YTD return was dragged into the negative region at -0.8%.

Specifically, sell-offs in DANGCEM (-2.1%), GUARANTY (-1.2%) and ZENITH (-1.6%) pulled the benchmark index lower. Similarly, investors lost N120.1bn as market capitalisation declined to N13.7tn. Activity level weakened as volume and value traded dipped 47.9% and 68.2% to 244.5m units and N1.9bn respectively.

The most traded stocks by volume were STERLING (100.4m), FBNH (23.7m) and WEMA (16.9m) while DANGCEM (N384.3m), FBNH (N251.1m) and GUARANTY (N236.9m) were the top traded stocks by value.

Bearish Sector Performance 
Sector performance was largely bearish as 4 of the 5 indices under our coverage closed southwards. The Oil & Gas index emerged lone gainer, up 0.8% following buy interest in MOBIL (+9.2%).

On the other hand, the Industrial Goods index shed the most, down 1.0%, due to losses in DANGCEM (-2.1%) while the Banking index trailed, shedding 1.0% as profit taking in GUARANTY (-1.2%) and ZENITH (-1.6%) dragged the index lower.

Similarly, the Consumer Goods index shed 0.1% as a result of sell-offs in NIGERIAN BREWERIES (-1.0%) and HONYFLOUR(-9.6%) which was dragged by underwhelming FY:2017 results while losses in CORNERST (-8.6%) and MBENEFIT  (-8.1%) pulled the Insurance index 0.1% southwards.

Investor Sentiment Weakens
Investor sentiment as indicated by market breadth (advance/decline ratio) weakened to 0.8x from 1.7x recorded in the prior session as 16 stocks advanced relative to 21 decliners.

Yesterday’s top gainers were AIICO (+9.8%), CILEASING (+9.7%) and UNITY (+9.3%) while FORTE (-9.7%), HONYFLOUR (-9.6%) and CORNERST (-8.6%) were the worst performers. While small to mid cap stocks have enjoyed bargain hunting from short-term investors, we continue to observe bearish sentiments on bellwethers.

Hence, we expect overall market performance to be bearish in subsequent sessions while emphasizing that valuations remain attractive for entry by long-term investors.

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