Investors in shares at the Nigerian Stock Exchange suffer N346.1 billion loss in the value of their investment as the negative trend in the equities market entered into the third consecutive trading day with the All Share Index (ASI) falling by 2.7 pert cent to close at 36,102.38 points whilst YTD gain further moderated to 34.3 per cent.
As a result market capitalisation declined by N346.1 billion to settle at N12.4 trillion. The poor performance was majorly attributable to negative sentiment towards DANGCEM (-4.9%) and GUARANTY (-4.7%) in addition to profit taking in NIGERIAN BREWERIES (-2.6%) and ZENITH (-3.3%). However, activity level on the exchange waned as volume and value traded dipped 42.6% and 6.4% to 224.8m units and N5.1 billion respectively.
The market had rallied for eight consecutive weeks and peaked at a 33-month high last week before profit takers took advantage of the gains to sell their holdings. Traders said a sharp rise in the market in the last few weeks was as a result of increased demand for equities by offshore funds with fresh mandate from their clients. “It appears that those buyers have completed their mandate and now they are taking profits on the previous gains,” Kayode Olayemi trader with CSL Stockbrokers said.
Shares in Guaranty Trust Bank (GTB) fell 4.68 per cent to close at N37.10, while Zenith Bank shares fell for a forth consecutive day, down 3.27 per cent to close at N22.50. The sharp declines in the banks’ shares followed the publication of poorly received first half results over the past week.
The equity market has benefited from the recovery in liquidity on the currency market with the introduction in April of a new forex window for investors to trade the naira at market-determined rates.
Performance across sectors was bearish as all indices trended southwards. The Industrial Goods index led losers, down 3.1 per cent on account of sustained losses in DANGCEM (-4.9%) and WAPCO (-1.7%). The Banking index followed suit, down 2.8 per cent due to declines recorded in GUARANTY (-4.7%), ZENITH (-3.3%) and ACCESS (-5.0%). GUARANTY released its H1:2017 earnings result, growing Gross Earnings and PAT by 2.0 per cent and 16.6 per cent to N214.1 billion and N83.7 billion respectively.
In the same vein, the Consumer Goods and Oil & Gas indices fell 1.0 per cent apiece on account of price depreciation in NIGERIAN BREWERIES (-2.6%), GUINNESS (-2.2%), TOTAL (-4.0%) and FORTE (-2.9%) respectively. Similarly, the Insurance index marginally declined 0.1 per cent owing to a drop in price of LINKASSURE (-1.3%).
In line with benchmark performance, market breadth remained weak, as the ratio of advancers to decliners settled at 0.3x (same as yesterday’s close of 0.3x) after 10 stocks gained against 30 losers. CILEASING (+5.2%), VITAFOAM (+4.4%) and UPL (+3.7%) led the gainers’ chart while ACCESS (-5.0%), FCMB (-5.0%) and STANBIC (-4.9%) were the worst performers. As we noted yesterday, market performance remains driven by profit taking after the sustained rally in prior weeks. Nonetheless, we believe this negative trend will be reversed on account of bargain hunting. Hence we anticipate a rebound in the equities market in subsequent sessions this week.
Market Statistics Wednesday, 16th August 2017
Market Cap (N’bn) 12,443.5
Market Cap (US$’bn) 40.7
NSE All-Share Index 36,102.38
Daily Performance % (2.7)
Week Performance % (5.4)
YTD Performance % 34.3
Daily Volume (Million) 224.8
Daily Value (N’bn) 5.1
Daily Value (US$’m) 16.7
