The downtrend on the Nigerian equities market continued last week, the first week of trading activities this year, as investors reduced positions in stocks ahead of the elections.
As a result, most counters on the local bourse remain undervalued, trading near one-year lows.
Persistent sell pressures in high capitalised stocks drove the All – Share- Index (ASI) 1.28 per cent lower Week-on-Week (W-o-W) to close at 30,638.90 points, resulting to year-to-date loss of 2.52 per cent. Similarly, market capitalisation decreased by N88 billion to close at N11.426 trillion.
Across sectors, performance was equally negative. The Industrial Goods index was the biggest loser, down 3.88 per cent due to losses in Lafarge Africa and Cement Company of Northern Nigeria (CCNN).
The Banking index trailed, falling 2.70 per cent as Access Bank and Zenith Bank witnessed price depreciation. In the same vein, sell-offs in AXA Mansard Insurance, Aiico Insurance, Dangote Flour and Nigerian Breweries dragged the Consumer Goods and Insurance indices 1.03 per cent and one per cent lower, respectively. On the other side, the Oil & Gas index gained by up 2.91 per cent following buy interest in Seplat Petroleum Development Company and Total Nigeria.
Market breadth closed negative with 22 gainers and 45 losers. Custodian Investment led the gainers table by 16.19 per cent to close at N6.10 per share. Julius Berger followed with a gain of 15.67 per cent to close at N23.25, while VitaFoam Nigeria rose by 12.50 per cent to close at N4.50 per share. On the other side, FCMB Group led the decliners’ table by 16.49 per cent to close at N1.62 per share. Glaxo SmithKline Consumer Nigeria followed with a loss of 15.86 per cent to close at N12.20 and Access Bank declined by 14.71 per cent to close at N5.80 per share.
The market opened for four trading days this week as the federal government of declared January 1, 2019 a public holiday to mark the new year celebrations.
Meanwhile, a total turnover of 1.647 billion shares worth N8.413 billion in 14,773 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 3.129 billion shares valued at N14.348 billion that exchanged hands previous week in 10,394 deals
Outlook for the week
Analysts at Afrinvest Limited said that “in the new week, we expect activity level to improve as Christmas festivities wrap up; and further anticipate that the central bank will continue in its pursuit to stabilise the value of the naira should any market volatility occur, possibly owing to pre-election uncertainties.”
Also, analysts at Cordros Capital said that “our view continues to favour cautious trading in the equities market amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger. However, we expect positive macroeconomic fundamentals to drive recovery in the long term.”
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