Nigeria Equity Watch | 1 July 2015: Nigerian Market Fizzles on H2 Portfolio Readjustment…NSE ASI down 177bps

Lagos, Nigeria (Capital Markets in Africa) — The Nigerian bourse reverted a 2-day gain as the benchmark index tumbled 1.8% to berth at 32,863.43 points today. Intraday market movement indicated that the NSE ASI slumped from 33300pts at mid-day to 32800pt before adjusting upwards at close of trade. We link the sharp decline of the index to sell down in DANGOTE CEMENT (-4.4%), STANBIC (-4.0%) and NIGERIAN BREWERIES (-1.0%) in today’s trading. As a result, market capitalization shed N202.6bn sliding to N11.2bn. However, Market activity improved as value and volume traded rose 10.2% and 20.5% to N4.7bn and 323.5m units respectively.

The Industrial sector led the losing course by 1.5% on the back of price depreciation in DANGOTE CEMENT (-4.4%). Loses in STANBIC (-4.0%), UBN (-4.9%) and ETI (-1.6%) today reflected in the 1.0% decline in the Banking index. The Consumer Goods, Oil & Gas and Insurance sectors declined 0.9%, 0.4% and 0.3% respectively.

13 stocks appreciated while 39 stocks declined, bringing market breadth (advancers/decliners ratio) to 0.3x. LIVESTOCK (+4.6%), STERLNBANK (+4.5%) and 7UP (+3.9%) led the advancers’ list while NEIMETH (-7.9%), EVANSMED (-5.0%) and UBN (-4.9%) led the decliners’ list. We believe today’s bearish momentum was broadly driven by half year portfolio reallocation as investor reposition for H2:2015. We reiterate our earlier position that investors should bet on fundamentally sound tickers ahead of half year earnings releases.

Source: Afrinvest (West Africa) Limited Research Team