Nigerian stocks in 3-day bearish trade as benchmark index dips to an 8-month low

The bears continued their dominance in the Nigerian the equities market Wednesday, which led to market capitalization paring N233.5bn in three days of trading to close N13.3 trillion, the lowest since the N13.2 trillion recorded on 4th Dec 4, 2017.

The negative performance of the market dragged benchmark index, NSEASI down 0.6 percent to 36,748.18 points – lowest since November 2017 – while YTD loss worsened to 3.9 percent.

Sell-offs in banking stocks – GUARANTY (-6.76%), FBNH (-9.8%), WEMABANK (-8.82) and ETI (-1.9%) were majorly responsible for pulling the benchmark index lower. Similarly, activity level waned as volume and value traded fell 11.0 percent and 31.3 percent to 181.2 million units and N1.6 billion respectively.

WEMABANK H1-18 positive results released earlier in the week, which showed a 28.69 percent y/y increase in PAT could not impact on its shares

The most traded stocks by volume were TRANSCORP (16.8m), ZENITH (15.2m) and FIDELITY (14.9m) while ZENITH (N361.7m), GUARANTY (N225.8m) and NESTLE (N117.4m) were the most traded stocks by value.

Performance across sectors was mixed as three of five major indices closed in the red. The banking index was the worst performer, down 2.0 percent, due to losses in GUARANTY (-6.76%), ETI (-1.9%) and WEMA (-8.8%).

Similarly, the 0il & gas and industrial goods indices fell 1.2 percent and 0.5 percent, following sell-offs in OANDO (-9.5%) and WAPCO (-1.5%) respectively.

On the flip side, the insurance and consumer goods indices rose 1.3 percent and 1.1 percent respectively, on the back of gains in CONTINSURE (+10.0%), LINKASSURE (+9.0%), INTBREW (+8.1%), PZ (+9.7%) and DANGSUGAR (+2.0%).

Investor sentiment as measured by market breadth (advance/decline ratio) strengthened to 0.9x from 0.4x recorded in the prior session as 20 stocks advanced relative to 23 decliners.

The day’s top gainers were CONTINSURE (+10.0%), PZ (+9.7%) and INTBREW (+9.3%) while FBNH (-9.8%), OANDO (-9.5%) and WEMA (-8.8%) were the worst performing stocks.

Analysts at Afrinvest Research say the relative strength index of the local bourse currently stands at 30.2 points, indicating the market has reached the oversold region.

“Irrespective of this reading, we expect market bearish trend to continue tomorrow. Nonetheless, we do not rule out the possibility of a rebound in the near term as investors respond to the incoming H1:2018 earnings results,” they noted.