The Nigerian stock market, which has defied the laws of gravity and skyrocketed past the N13 trillion market capitalization in a matter of eights weeks appears to be slowing as investors start booking profit.
Stocks performance Monday was negative as market benchmark index shed 0.6 per cent to close at 37,950.96 points, while market capitalization dipped N85.4 billion to close at N13.1 trillion.
Consequently, year-to-date gain trimmed to 41.2 percent from 42.14 percent recorded at the previous trading session.
Monday’s market performance was influenced by bearish sentiment towards DANGCEM (-2.1%), UBA (-2.8%), ZENITH (-1. 1%) and DANGSUGAR (-1.8%).
Market activity equally waned as volume and value traded fell 10.6 percent and 33.0 percent to settle at 316.1 million units and N4.2 billion respectively.
Performance across sectors was broadly bearish as all indices closed in the red save for the consumer goods index, which sustained its gaining streak, climbing 0.2 percent on account of unrelenting gains in NIGERIAN BREWERIES (+1.1%).
The industrial goods index led sector losers, dipping 1.1 percent due to losses in DANGCEM (-2.1%), while the insurance index followed suit, dipping 0.4 percent as a result of price depreciation in NEM (-4.5%).
Likewise, the banking and oil & gas indices slid 0.3 percent apiece owing to a downturn in UBA (-2.8%), ZENITH (-1.1%) , TOTAL (-5.0%) and OANDO (-3.7%) respectively.
Investor sentiment at the close of trade further waned to 0.7x (against 0.8x recorded on the previous Friday’s close) following 18 stocks that advanced against 25 decliners.
The top performing stocks for today’s trade were FIDSON (+4.7%), AGLEVENT (+4.3%) and LINKASSURE (+4.0%) while the worst performers were CILEASING (-9.3%), TOTAL ( -5,0%) and MAYBAKER (-4.8%).
Analysts expect cautious trades in the days ahead on the possibility more profit-taking in the near-term and sustainability of the ongoing forex liquidity in the long term.
They say a possible sudden slump in oil price may end the bullish party, as it would weaken the CBN’s ability to sustain the current favorable forex supply.
They specifically single out the recent stability of the forex market as the main driver for the astronomic appreciation of the NSE, adding that though companies’ fundamentals are improving, a steep decline in oil price or disruption in production could end the bullish party.