Poor Corporate earnings depress equities market as sustained profit taking drags ASI 0.4% lower

Following an influx of not so impressive corporate earnings released by listed companies on the Nigerian Stock Exchange (NSE) this week, losses in the equities market extended into the second consecutive day as the All Share Index (ASI) inched southwards by 0.4 percent.

For instance, Seplat on Wednesday declared a profit after tax decline of 45 percent, negatively impacting bottom line and earnings to be distributed among shareholders.

Sustained declines in big cap stocks such as Dangote Cement (-0.8%), Nigerian Breweries (-2.3%) and Guaranty Trust Bank (-0.8%) also impacted market performance negatively as market capitalisation fell by N26.9 billion to N11.9 trillion while year to date returns moderated to 1.85 percent.

Activity chart showed levels were mixed as volume traded advanced by 4.9 percent to 218.5 million units while value traded fell 1.7 percent to N2.7 billion.

The top traded stocks by volume were Zenith (34.8m units), Access (29.2m units) and FBN Holdings (29.0m units) while top traded by value were Zenith (N859.7m), Guaranty (N850.1m) and FBN Holdings (N235.9m).

Performance across sectors was bearish as all sectors closed in the red. The Insurance and Oil & Gas indices led declines, retreating 1.0 percent apiece due to losses in Cornerstone Insurance (-8.0%), Mutual Benefit (-8.0%), AIICO Insurance (-1.4%), Oando (-1.8%) and Mobil (-5.6%).

Similarly, the Industrial Goods index extended losses, down 0.4 percent due to sustained profit taking activities in Dangote cement (-0.8%) while the Consumer Goods index lost 0.2 percent based on price depreciation in Nigerian Breweries (-2.3%), PZ (-8.3%) and Flour mills (-4.8%).

Also, the Banking index reversed prior-day trading gains, down 0.1 percent as investors sold position in Guaranty (-0.8%), Access (-1.6%) and Diamond (-2.4%).

The top gainers for the day were Cadbury (+7.8%), Dangote Flour (+4.1%) and Stanbic (+3.0%) while the least performing stocks were University Press Limited (-9.8%), United Capital (-9.1%) and Royal Express (-8.6%).

Despite the last two sessions performance, the equities market benchmark index is expected to gain on Friday, according to analysts at Afrinvest. This projection, they said, is based on investor’s bargain hunting and positioning ahead of dividend announcements.