Stock Market Reverses Gains on Weak Investor Sentiment

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WEEKLY REPORT

By Goddy Egene and Nosa Alekhuogie

The stock market continued on the downward trend recording its third consecutive negative weekly performance last week as the bears remained in charge. Investors’ sentiments remain weak at the market, as they ignore positive results being declared by some companies. Considering the huge capital gains recorded during the bullish period that lasted between May and July, many investors continued to sell in order to lock in profits. This sell pressure has made the market to remain bearish for the past three weeks. The market had signalled some improvement towards the end of the previous week gaining 0.19 per cent on Friday. However, the bears resurfaced on Monday and extended sell-offs throughout last week.

As a result, the Nigerian Stock Exchange (ASI) fell by 3.12 per cent to close at 35,504.62, while market capitalisation ended at N12.237 trillion. Apart from the ASI that went down, the NSE Consumer Goods Index shed 2.8 per cent, followed by the NSE Industrial Goods Index that depreciated by 2.4 per cent. Similarly, the NSE Banking Index fell 2.3 per cent..
However, on the positive side, the NSE Insurance Index appreciated by 1.9 per cent while the NSE Oil & Gas Index closed 0.29 per cent higher.

Daily Market Performance
Having shed 0.74 per cent the previous week, the market remained bearish on Monday with the ASI depreciating by 0.90 per cent to close at 36,317.31, depressed by decline in shares of Dangote Cement, Nigerian Breweries, GTBank, Zenith Bank, and United Bank for Africa. Investors traded 348.11 million shares worth N3.25 billion in 3,276 deals on the first day of the week.
The three most actively traded sectors were: Financial Services (291.61 million shares), Oil and Gas (28.54 million shares), and Consumer Goods (12.87 million shares), while the three mostly actively traded stocks were: Custodian and Allied Insurance (190.55 million shares), Oando (27.37 million shares) and Access Bank (14.94 million shares).
In terms of sectoral performance, two of five sectors closed higher. The positive side was led by the NSE Oil & Gas Index, advancing by 0.3 per cent following renewed interest in Total (+9.1 per cent). The NSE Insurance Index rose 0.2 per cent on the back of price appreciation recorded by Continental Reinsurance Plc (+3.9 per cent).
Conversely, the NSE Banking Index led the losers, going down by 1.6 per cent following profit taking in GTBank (-3.0 per cent) and Zenith Bank (-1.3 per cent).
The NSE Consumer Index closed 1.4 per cent lower, while the NSE Industrial Goods Index shed 0.2 per cent.
The negative trend continued on Tuesday, driving the index further down by 0.42 per cent to close at 36,165.93, while market capitalisation ended lower at N12.47 trillion.
Losses recorded by Dangote Cement, Nigerian Breweries, FBN Holdings, Guinness, and UBA were mainly responsible for the decline. Investors lost a total of N52.2 billion.
However, investors in banking stocks gained as the NSE Banking Index appreciated by 0.3 per cent consequent on positive sentiment towards GTBank (+0.8 per cent) and Stanbic IBTC (+1.3 per cent). But the NSE Industrial Goods Index and NSE Oil & Gas Index emerged the top losers, declining by 0.5 per cent apiece. Similarly, the NSE Consumer Goods Index followed with 1.6 per cent following decline in Nigerian Breweries (-1.1 per cent) and Guinness (-1.4 per cent) while the NSE Insurance Index closed 0.01 per cent lower.
Profit taking activities continue to depress the market on Wednesday as the ASI depreciated 1.48 per cent to close at 35,629.13. Investors traded 239.90 million shares valued at N2.93 billion in 4,371 deals.
The three most actively traded sectors were: Financial Services (205.43 million shares), Consumer Goods (11.80 million shares), and Conglomerates (10.89 million shares). In the same vein, the three most actively traded stocks were: Fidelity Bank (42.81 million shares), Sterling Bank (39.15 million shares) and Access Bank (33.02 million shares).
Four sectors declined while appreciated. The lone gainer was the NSE Insurance Index which rose by 0.3 per cent. The NSE Industrial Goods Index led the losers, down 1.8 per cent on account price depreciation in Dangote Cement (-3.8 per cent) . It was followed by the NSE Banking Index with 0.8 per cent, while the NSE Oil & Gas Index slid 0.5 per cent. The NSE Consumer Goods Index closed 0.1 per cent.
The market maintained its negative performance on Thursday, which was the last trading of the week leading to a decline of 0.35 per cent to close at 35,504.62.
The depreciation recorded in the share prices of Lafarge Africa, Nigerian Breweries, GTBank, Nestle, and UBA was mainly responsible for the loss recorded in the index.
Sectorally, three appreciated while two fell. The NSE Insurance Index gained the most, up 1.4 per cent on account of price appreciation in Continental Reinsurance (+5.0 per cent) and AXA Mansard Index (+2.6 per cent). The NSE Oil & Gas Index followed, adding 0.9 per cent due to gain by Total (+0.8 per cent). Similarly, appreciation in Dangote Cement (+0.2 per cent) buoyed the NSE Industrial Goods Index by 0.1 per cent. On the flip side, the NSE Consumer Goods Index fell 1.0 per cent just as the NSE Banking Index shed 0.2 per cent.

Market Turnover
Meanwhile, investors traded a total 998.973 million shares worth N11.455 billion in 13,626 deals were traded last week as the market opened for four days because Friday, was declared public holiday to commemorate Eid -el-Kabir celebrations. The market turnover lower than the 1.538 billion shares valued at N24.218 billion that exchanged hands the previous week in 19,187 deals.
The Financial Services Industry led the activity chart with 838.247 million shares valued at N5.134 billion traded in 7,884 deals, thus contributing 83.91 per cent and 44.82 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 45.589million shares worth
N3.225 billion in 2,759 deals. The third place was occupied by Conglomerates Industry with a turnover of 35.563 million shares worth N60.673 million in 627 deals.
Trading in the top three equities namely, Custodian and Allied Plc, Sovereign Trust Insurance Plc and Fidelity Bank Plc. Also traded during the week were a total of 86,063 units of Exchange Traded Products (ETPs) valued at N838,754.79 executed in eight deals compared with a total of 390 units valued at N6,511.60 transacted the previous week in five deals.
Similarly, total of 12,244 units of Federal Government Bonds valued at
N12.374 million were traded in 11 deals, compared with a total of 3,657units valued at N2, 866,267.62 transacted two weeks ago in nine deals.

Price Gainers and Losers
A look at the price move chart showed that 19 equities appreciated compared with 32 shares of the previous week, while 48 stocks dipped as against 40 price losers of the previous week. Cutix Plc led the price gainers with 24 per cent, trailed by Continental Reinsurance Plc with 13.9 per cent. Total Nigeria Plc added 13 per cent, while Fidson Healthcare Plc appreciated by 6.0 per cent.
Custodian & Allied Plc and May & Baker Nigeria Plc garnered 5.2 per cent apiece. PZ Cussons and NewRest ASL appreciated by 4.9 per cent. Neimeth International Pharmaceuticals Plc, just as Vitafoam Nigeria Plc chalked up 4.4 per cent.
Conversely, Double 11 Plc led the price losers with 14.2 per cent, followed by First Aluminium Plc shed 12.7 per cent. Julius Berger Nigeria Plc and C & I Leasing Plc went down by 9.9 per cent and 9.7 per cent in that order.
Other top price losers included: Morison Industries Plc(8.8 per cent); Guinness Nigeria Plc (7.3 per cent ); FCMB Group Plc (6.9 per cent); Linkage Assurance Plc (6.9 per cent);UBA (6.1 per cent) and Nigerian Breweries Plc (5.2 per cent).