The equity market closed in the red this week following three trading sessions of profit taking. At the start of the week, investors reacted negatively to the postponed presidential election before recalculating the political risk and subsequently re-positioning in bellwethers on Tuesday. We had anticipated the market to maintain a positive position till Friday based on improved sentiments on Tuesday, but this was short-lived as we observed more cautious trading in terms of volumes and higher sell-offs before the close of the week. We believe most investors stayed on the sidelines during the week as the uncertainty regarding the elections heightened by mid-week.
As a result, the benchmark index declined 0.6% W-o-W to 32,525.5 points, largely driven by losses in DANGCEM (-0.8%), NIGERIAN BREWERIES (-3.6%) and ETI (-2.1%), YTD gain moderated to 3.5% while market capitalization decreased by N74.5bn to N12.1tn. Activity level also weakened as average volume and value fell 47.9% and 37.3% to 295.3m units and N3.5bn respectively. The top traded stocks by volume were TRANSCORP (184.1m units), STERLING (121.7m units) and ACCESS (89.2m units) while GUARANTY (N3.4bn), NESTLE (N2.4bn) and ZENITH (N2.1bn) led by value.
Across sectors, performance was mixed with 3 of 5 indices closing in the green W-o-W. The Banking index led gainers, up 0.7% due to price appreciation in ZENITH (+4.0%) and GUARANTY (+0.7%). The Oil & Gas and Insurance indices trailed, inching higher by 0.1% and 2bps respectively on the back of gains in OANDO (+8.3%), NEM (+2.0%) and MANSARD (+1.0%). On the flip side, the Consumer and Industrial Goods indices shed 1.5% and 1.4% respectively as NIGERIAN BREWERIES (-3.6%), UNILEVER (-1.1%), DANGCEM (-0.8%) and WAPCO (-0.4%) recorded losses.
Investor sentiment as measured by market breadth (advance/decline ratio) softened, albeit positive to 1.6x from 3.2x recorded the prior week. The best performing stocks for the week were JAPAULOIL (+25.0%), ABCTRANS (+23.8%) and IKEJAHOTEL (+17.7%) while LIVESTOCK (-19.4%), WEMA (-18.4%) and TRANSCORP (-15.2%) led laggards. In the coming week, we expect market direction to be largely determined by the outcome of the presidential election.
Afrinvest
