The Nigerian equities market last week closed negative, with N140 billion loss as investors’ sentiment on blue chip companies was weak. The overall market performance measure, NSE ASI declined by 383.22 points or 1.17 per cent to close at 32,383.15 points, week-on-week (W-o-W). Similarly, market capitalisation lost N140 billion to close at N11.822 trillion.
The major drags to performance in the week were Dangote Cement, Nigerian Breweries and United Bank for Africa (UBA). Sector performance in the week was largely bearish. The Insurance index depreciated the most, losing 1.01 per cent W-o-W, following sell offs in Niger Insurance and NEM Insurance. Likewise, the Banking index fell 0.65 per cent, against the backdrop of price depreciations in Stanbic IBTC Holdings and UBA, while the Industrial and Consumer Goods indices were dragged 0.35 per cent and 0.32 per cent southwards by losses in Dangote Cement and Nigerian Breweries respectively. On the flipside, the Oil & Gas index gained by 1.13 per cent on the back of gains in Forte Oil and Japaul Oil Maritime Services.
Market breadth remained negative with 32 losers and 27 gainers. Cutix led the gainers table by 15.37 per cent to close at N4.73 per share. Forte Oil followed with a gain of 10.22 per cent to close at N22.10, while Japaul Oil & Maritime Services rose by 9.09 per cent to close at 24 kobo per share. On the other side, Niger Insurance led the decliners’ table by 18.92 per cent to close at 30 kobo per share. Law Union and Rock Insurance followed with a loss of 15.38 per cent to close at 55 kobo and Neimeth International Pharmaceuticals declined by 10.61 per cent to close at 59 kobo per share. Also, a total turnover of 639.317 million shares worth N7.842 billion in 10,477 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 924.546 million shares valued at N14.194 billion that exchanged hands previous week in 14,119 deals.
Outlook for the week
This week, analysts at Cowry Asset Management expected the NSE ASI to close in green territory, given the earning season. According to them, “ We also feel domestic retail and institutional investors would take advantage of the undervalued stock prices to acquire more shares as the potential for higher dividend yields increases.
“More so, we maintain that investors should hunt for companies that have recorded increased earnings as at H1 2018 with tendencies to sustain the performance.”
While analysts from Cordros Capital Limited stated that “our outlook for equities in the near-to-medium term is negative, and we guide investors to trade cautiously, amidst absence of a near term positive catalyst and political jitters ahead of the upcoming 2019 elections. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term.”