Downtrend in stock market continues, NSE ASI sheds 1.2% in one week

The bearish sentiment in the domestic bourse persisted for the sixth consecutive week as the NSE All Share Index (ASI) recorded losses on 3 of 5 trading sessions. Thus, the benchmark Index dipped 1.2 week-on-Week (W-o-W) to settle at 27,306.81 points while Year-to-Day (YTD) loss worsened to -13.1 per cent.

Similarly, investors lost N157.7 billion in value as market capitalisation decreased to N13.3 trillion.

However, activity level was mixed as average volume rose 42.4 per cent to 220.8 million units while value traded fell 14.4 per cent  to N4.5 billion.

The top traded stocks by volume were STERLING (206.7 million units), ACCESS (114.4 million units) and FBNH (102.3 million units) while GUARANTY (N1.5 billion), ZENITH (N1.4 billion) and MTNN (N1.0 billion) were the top traded stocks by value.

The week started on a positive note as gains in DANGSUGAR, CCNN and MTNN pushed the All Share Index up by 10 basis points (bps) on Monday. However, the bullish performance was reversed as the benchmark index closed lower at -0.5 per cent and -0.4 per cent on Tuesday and Wednesday respectively. On Thursday, the market moved up slightly with a gain of 5bps due to price appreciation in MTNN.

Finally, sentiment weakened on Friday as ASI dipped 40bps due to selloffs in MTNN and ZENITH.

Performance across sectors was bearish as 5 of 6 indices under our coverage trended southwards W-o-W. The Banking index led the laggards, down 6.1 per cent on the back of sell pressures in UNITY (-13.5 per cent), FBNH (-11.6 per cent) and ZENITH (-10.7 per cent). The Insurance Index trailed, declining 3.9 per cent following losses in CONTINSURE (-19.2 per cent) and LAWUNION (-17.0 per cent). Similarly, the Oil & Gas and Consumer Goods Indices lost 1.6 per cent and 0.6 per cent  respectively due to price depreciation in FORTE (-12.6 per cent) and GUINNESS (-10.0 per cent). Losses in BETAGLAS (-9.9 per cent) drove the Industrial Goods index 0.3 per cent lower. On the flip side, the AFR-ICT index emerged the lone gainer, up 1.8 per cent driven by MTNN (+3.1 per cent).

Investors sentiment as measured by market breadth (advance/decline ratio) worsened to 0.3x from 1.2x recorded last week Friday as 11 stocks advanced against 41 that declined. The top performing stocks were CCNN (+13.4%), DANGFLOUR (+11.4%) and BOCGAS (+9.9 per cent) while CONTINSURE (-19.2%), LAWUNION (-17.0 per cent) and UNITY (-13.5 per cent) led the losers.

“We believe that the bearish run would persist as investors maintain a risk-off approach towards investing in the domestic equities market. However, we see opportunities for bargain hunting in stocks with sound fundamentals”,said analysts at a Afrinvest.

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