By Charles Abuede
Sentiments were dampened in the Nigerian equities market on Tuesday owing to profit-takings on top stocks that posted their biggest wins in the previous year, forcing the local bourse to retreat to a bearish stance on the second trading day of the week and the year.
It offered strong indications that the market is on the threshold of consolidation, where market investors will see range bound movements till the end of the week. Read Also:
At the close of the day’s trading, the market posted a negative performance as the benchmark index declined 183 basis points to close at 40,396.14 points. This bearish performance was driven by losses in BUA Cement (-5.9%), MTN (-2.8%) and Zenith Bank (-4.3%).
As a result of this performance, year-to-date (YTD) return fell to 0.3 per cent, while market capitalisation decreased by N392.8 billion to settle at N21.12 trillion, from N21.52 trillion the previous day.
Despite the negative performance, trading activity level surged as volume and value traded advanced 119.7 per cent and 265.6 per cent to 465.7 million units and N5.1 billion respectively. The most traded stocks by volume were Transnational Corporation (69.2 million units), Zenith Bank (31.7 million units) and FCMB (26.6 million units) while Zenith Bank (N788.3 million), Nigerian Breweries (N606.5 million) and MTN Nigeria (N591.7 million) led by value.
Bearish sector performance
The market performance across sectors was bearish as five of six indices closed in the red. The banking and industrial goods indices led losers, shedding 3.0 per cent and 2.7per cent, respectively, due to sell-offs in Zenith Bank (-4.3%), GT Bank (-2.8%), BUA Cement (-5.9%) and Wapco Plc (-2.4%). Similarly, the AFR-ICT and consumer goods indices fell 1.2 per cent and 0.3 per cent in that order, dragged by price depreciation in MTN Nigeria (-2.8%), Flour Mills (-3.2%) and Dangote Sugar (-1.1%). The oil & gas index fell marginally by three basis points following losses in Oando (-10.0%). Conversely, the insurance index was the lone gainer, up 1.6 per cent due to buying interest in Cornerstone Insurance (+6.8%) and Sovereign Insurance (+9.1%).
Investor sentiment worsens
Investor sentiment as measured by market breadth (advance/decline ratio) worsened to 0.4x from the 15.5x recorded previously as 15 stocks advanced against 34 decliners. BOC Gas (+9.7%), NEM (+9.5%) and Sovereign Insurance (+9.1%) were the best-performing tickers, while Oando Plc (-10.0%), FTN Cocoa (-9.7%) and MAY & BAKER (-8.5%) were the only losers. […]