Nigerian Equity Markets | 9 Sep 2015: Market Tumbles on JPMorgan’s Notification…NSE ASI Losses 2.9%

Lagos, Nigeria, Capital Markets in Africa — The Nigerian Bourse halted 3 consecutive days of gains as the Benchmark Index –All Share Index (ASI)- succumbed to heavy sell offs in the market, slumping 2.9% to close for the day at 29,454. 09points. We believe trading activities today were largely driven by panic in the market due to JP Morgan’s announcement to begin the de-listing of Nigerian Government Bonds from its emerging markets bond Index (GBI-EM) by 30th September, 2015. The stocks that spearheaded this poor performance were GUARANTY (-5.0%) DANGCEM (-4.1%) and NIGERIAN BREWERIES (-3.8%) as investors lost a total of N311bn to bring market capitalization to N10.1tn. Activity level in the market also strengthened as total volume and value traded appreciated 102.7% and 114.4% to settle at 459.4m units and N4.3bn respectively.

All sector indices traded Southwards with the Banking sector Index losing the most (-3.9%) as sell offs in GUARANTY (-5.0%) and ZENITH (-5.0%) dragged the index down. The Industrial Index also declined 2.5% largely driven by price depreciation in DANGCEM (-4.1%). In the same vein, the Oil & Gas and the Consumer goods Indices depreciated 2.2% and 2.1% respectively while the Insurance index capped off the poor performance with a loss of 1.9%.

Investor sentiments clearly reverted to negative today as market breadth, measured by advancers to decliners’ ratio, berthed at 0.2x with 9 stocks advancing against 49 declining stocks. The Best performing stocks for the day were TRANSEXPR (+9.2%), FIDSON (+5.0%) and GUINNESS (+5.0%) while the worst performing stocks were OANDO (-8.2%), FIDELITYBK (-5.3%) and FBNH (-5.2%). As noted earlier, we believe today’s performance was primarily related to the immediate reaction to the announcement by JP Morgan to remove Nigeria from its GBI-EM index, thus we imagine that sell offs may persist in the interim. Pending information that may change investor sentiments towards the market, we advise investors to trade cautiously.

Source: Afrinvest (West Africa) Limited Research Team 

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