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Stocks Market Drags On Profit Taking From High Cap Stocks, As ASI Down 1.63% W-o-W

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Last week, the Nigerian stocks market posted a bearish performance as profit taking on high capitalized stocks dragged the All-Share Index (ASI) down by 1.63 per cent week-on-week (W-o-W).

The ASI dropped 577.72 points or 1.63 per cent to close at 34,848.45 points, leading to increases in the Month-to-Date and Year-to-Date losses, to 5.86 per cent and 8.88 per cent respectively. In the same vein, market capitalisation decreased by N211 billion to N12.722 trillion.

The stocks market closed red in four of the five trading sessions, as sell pressure ensued in value stocks. While noting that the lower-than-expected GDP growth figure sent negative signals to the market, news of the apex bank’s fine on Stanbic IBTC Holdings and Diamond Bank for illegally repatriating funds on behalf of Telecommunications Company, MTN Nigeria, also contributed to the market’s negative sentiments.

Similarly, all other indices finished lower with the exception of the NSE Consumer Goods and NSE Oil and Gas indices that rose by 0.34 per cent and 0.97 per cent respectively. The Industrial Goods sector led decliners after losing 4.73 per cent W-o-W, following profit taking in Dangote Cement and Lafarge Africa. Similarly, the Banking index shed 1.49 per cent W-o-W on the back of sell-offs in Guaranty Trust Bank, Zenith Bank and FBN Holdings, while persistent sell pressures in Continental Reinsurance, Standard Alliance Insurance and Sovereign Trust Insurance dragged the Insurance index 0.09 per cent W-o-W.

Market breadth was negative, by a slim margin, as 37 equities appreciated in price during the week, higher than 15 in the previous week, while 34 equities depreciated in price, lower than 45 equities of the previous week. Portland Paints & Products Nigeria led the gainers table by 20.65 per cent to close at N2.98 per share. Aiico Insurance followed with a gain of 17.14 per cent to close at 82 kobo, while PZ Cussons Nigeria rose by 14.94 per cent to close at N15 per share. On the other side, Ikeja Hotel led the decliners table by 18.64 per cent to close at N2.27 per share. First Aluminum Nigeria followed with a loss of 15 per cent to close at 34 kobo and Glaxo SmithKline Consumer Nigeria declined by 14.38 per cent to close at N13.10 per share.

Outlook For This Week

This week, analysts at Cowry Asset Management expected the local bourse to close in red territory as investors, especially FPIs, continue to sell their shares amid slower growth in second quarter, 2018 GDP and higher T-bills stop rates.

They noted that “we believe the sell-offs would present buy opportunity as shares become more undervalued. More so, we reiterate that investors should hunt for companies with potentially high dividend yields and have recorded increased earnings as at first half of 2018.”

Analysts at Afrinvest Limited stated that “following the bearish performance this week, we expect sell pressures to persist over the near-term given the general negative mood in the market, and lack of drivers to sway the market to the positive region.”



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