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Stocks Market Records 2.33% Weekly Loss On Sustained Sell-off

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The Nigerian stocks market declined week-on-week (w-ow) by 2.33 per cent as prices fell across-the-board on the local bourse amid sustained negative investors’ sentiment.

Reviewing market performance for last week, analysts at Afrinvest Limited said that “the downtrend remains largely driven by the lingering uncertainties around the 2019 general elections which we expect to be sustained. Nevertheless, we maintain that the current trend is not necessarily a true reflection of the fundamentals of companies and we believe that opportunities still remain in the market. Consequently, despite the overall negative performance, there were periods of intraday gains during the week.”

On a W-o-W basis, the All Share Index by 2.33 per cent to record its highest weekly loss in four weeks and dropped to a 52-week low of 34,037.91 points. As a result, the Year-to-Date loss rose to a new high of 11.00 per cent. Likewise, market capitalisation went down by N296 billion to close at N12.426 trillion.

Sector performance was also bearish as all indices closed in the red W-o-W. The Oil & Gas index depreciated the most, down 3.7 per cent W-o-W following losses in Seplat Petroleum Development Company and Oando while sustained sell offs in Nigerian Breweries and Unilever Nigeria dragged the Consumer Goods index 2.7 per cent southwards. Similarly, the Banking and Industrial Goods indices fell 2.4 per cent and 1.9 per cent following price depreciation in Guaranty Trust Bank and Dangote Cement respectively. The Insurance index closed out the negative performance with a 0.1 per cent decline W-o-W.

Market breadth remained negative with 33 gainers against 39 decliners. Consolidated Hallmark Insurance led the gainers table by 26.67 per cent to close at 38 kobo per share. Continental Reinsurance followed with a gain of 16.79 per cent to close at N1.60, while C&I Leasing rose by 16 per cent to close at N2.90 per share. On the other side, Law Union and Rock Insurance led the decliners table by 26.03 per cent to close at 54 kobo per share. Standard Alliance Insurance followed with a loss of 23.68 per cent to close at 29 kobo and Universal Insurance declined by 17.50 per cent to close at 33 kobo per share.

Meanwhile, a total turnover of 892.725 million shares worth N13.075 billion in 15,607 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.533 billion shares valued at N23.026 billion that exchanged hands previous week in 17,009 deals.

Outlook For This Week

Analysts at Cordros Capital Limited said that “our outlook for equities in the near-to-medium term is negative, owing to the absence of a near term positive catalyst and lingering jitters across the global space. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term.”

Also, analysts at Cowry Asset Management added that “this week, we expect the NSE ASI to close negative as we do not see any event that will provide support amid sell-offs by investors, especially the FPIs. Thus, we believe the sell-offs would present buy opportunity as shares become more undervalued. More so, we maintain that investors should hunt for companies with potentially high dividend yields and have recorded increased earnings as at H1 2018.”



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