Nigerian Stock Market Gasps for Air as Sell-offs Persist

Nigerian Stock Market Gasps for Air as Sell-offs Persist

The Nigerian stock market gasps for air this week after sustained sell-offs that saw equities valuation falling for four out of five trading days.

After this four day losing streaks recorded, the equity segment of the Nigerian Stock Exchange dips N245 billion as investors adjust portfolios.

Market appears to be reacting to yield repricing in the fixed income segment as All-share index continues downward trend, resulting to widening of year to date losses.

Consequently, the benchmark index lost 1.2% week on week to 39,331.61 points.

Also, profit-takings worsen year to date loss to 2.3% while market capitalisation fell ₦245.0 billion to ₦20.6 trillion.

Meanwhile, trading activity improved as average volume and value increased 8.4% and 44.0% to 418.4 million units and ₦5.9 billion respectively.

The most traded stocks by volume were WEMABANK (374.5 million units), ZENITH (148.8 million units) and UNIVINSURE (83.4 million units).

Meanwhile ZENITH (₦3.8 billion), NESTLE (₦3.1 billion) and GUARANTY (₦1.8 billion) led by value.

In a market report, Afrinvest said performance across sectors was lacklustre week on week as all indices under its coverage lost save the Industrial Goods index.

The Industrial Good index gained 1.4% due to gains in BUACEMENT (+1.1%).

However, the Consumer Goods index led the losers, down 6.3% following losses in CHAMPION (-33.3%) and NASCON (-19.0%).

Trailing, the Insurance and Oil & Gas indices fell 5.0% and 2.2% respectively, following price declines in MBENEFIT (-12.5%), LINKASSURE (-10.7%) and OANDO (-23.2%).

Similarly, sell pressures in STERLNBA (-14.0%), WEMABANK (-12.7%) and MTNN (-2.3%) dragged the Banking and AFR-ICT indices down by 1.9% and 1.2% respectively.

Investor sentiment as measured by market breadth waned to 0.2x from 0.4x recorded the previous week as 12 stocks gained against 67 that lost.

MORISON (+20.0%), UNITYBNK (+9.0%) and BETAGLAS (+8.0%) led the top gainers while CHAMPION (-33.3%), OANDO (-23.2%) and NASCON (-19.0%) led the decliners.

“For the coming week, we expect a mixed performance with positive bias for bargain hunting”, Afrinvest said.

In a new report, Cowry Asset Management noticed that the Nigerian equities market was generally bearish in February amid profit taking activity.

It said this was against the backdrop of the rising yield environment (stop rates of auctioned government securities trended higher) which attracted safe haven investors.

The NSE ASI and market capitalization each flagged month on month by 6% to 39,799.89 points and N20.82 trillion respectively – the first negative monthly performance registered in eight months.

Meanwhile, year-to-date performance was slightly negative at 1%.

The banking, consumer goods and industrial subsectors closed in the red as investors as investors realized profit.

NSE Industrial index fell the most by 7.5%, as shares of Lafarge Africa (trading symbol: WAPCO) tumbled by 23%, while NSE Banking index declined by 2.6%.

Also, NSE Consumer Goods index shed 1.7% as shares of Northern Nigeria Flour Mills tanked by 27%. The general bearish sentiment notwithstanding, a few subsectors – insurance and oil & gas stocks – closed in the green.

The NSE Insurance Index rose by 6.6% as shares of LASACO Assurance spiked by 193% after being lifted from full trading suspension upon completion of the company’s share reconstruction exercise.

Similarly, the NSE Oil/Gas Index climbed by 17.3% as shares of Eterna, Seplat and Oando buoyed by 10%, 8% and 5% respectively amid rising global crude oil prices.

PMI: Economic Recoveries in Nigeria, Others Could Disappoint in Q3

Market activity was weaker – total deals, transacted volumes and Naira votes fell by 12.2%, 34.9% and 13.4% to 106,663 deals, 8.9 billion shares and N92.24 billion respectively.

Nigerian Stock Market Gasps for Air as Sell-offs Persist