Negative Sentiment Strengthens on NSE as Market Cap Dips N140bn

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Trading on the domestic equity market sustained its consecutive bearish performance from the previous week on Monday, May 13, as the market capitalisation declined by N140.1bn to settle at N10.7 trillion to start the new trading week.

Performance indicator of the market, which is the NSE All Share Index (ASI) shed 98 basis points to settle at 28,565.67 points due to sell-offs in NESTLE (-2.5%), GUARANTY (-3.1%) and STANBIC (-4.2%). As a result, the year-to-date loss worsened to -9.1%.

Activity level was mixed as volume traded fell 8.7% to 214.7m units while value traded rose 104.7% to N2.8bn. The top traded stocks by volume were UACN (41.3m units), GUARANTY (38.0m units) and UBA (16.0m units) while GUARANTY (N1.2bn), UACN (N289.1m) and ZENITH (N222.0m) were the top traded stocks by value.

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Performance across sectors was equally bearish as all indices closed in the red. The Banking and Insurance indices led decliners shedding 2.8% and 2.7% respectively following profit taking in GUARANTY (-3.1%), STANBIC (-4.2%), NEM (-10.0%) and AIICO (-5.7%). The Oil & Gas index trailed, down 1.0% on the back of losses in MOBIL (-4.6%) while the Consumer Goods index fell by 0.4% following sell offs in NESTLE (-2.5%), GUINNESS (-2.9%) and DANGSUGAR (-1.4%). Finally, DANGCEM (-0.3%) and CUTIX (-2.7%) dragged the Industrial Goods index 0.1% lower.

Investor sentiment as measured by the market breadth (advance/decline ratio) weakened to 0.4x from 0.5x recorded the previous trading session as 11 stocks appreciated against 30 decliners.

The top performing stocks were NEIMETH (+10.0%), OKOMUOIL (+10.0) and AGLEVENT (+8.3%) while NEM (-10.0%), CHAMS (-10.0%) and UCAP (-9.4%) led the laggards.

Following the day’s negative performance, analysts at Afrinvest, a Lagos based investment firm stated that they “expect the bearish sentiment to persist in the absence of market events. However, we do not rule out the possibility of bargain hunting in bellwethers that have declined to drive market performance in subsequent trading sessions.”