Bears return, haul N218.2bn off market capitalization





Bears returned to the Nigerian Stock Exchange (NSE), pushing bulls aside to make away with N218.2 billion in one week. In the global scene, investors refused to calmed by the seemingly positive trade talks and the cut in crude oil production by the Organisation of Petroleum Exporting Countries (OPEC). 
Last week, the Nigerian market All-Share Index (ASI) went down 50 basis points (bps) Week-on-Week (w/w). 


Analysts attributed the turn of the tide to investors who used the opportunity of the previous four weeks gains to earn themselves some profit. Consequently, the All Share Index shed 0.5 per cent to close at 26,855.52 points while Year-to-Date (YTD) return worsened to -14.6 per cent. 
“Similarly investors lost ₦218.2 billion as market capiltalisation depreciated to ₦13.0 trillion”, said Afrinvest. 
Losses in the equities market were largely driven by price depreciation in CORNERSTONE (-20.3 per cent), ARBICO (-9.8 per cent) and IKEJAHOTEL (-9.7 per cent). Activity level slowed as average volume and value slipped 18.0 per cent and 3.0 per cent to 197.0 million units and ₦3.5 billion respectively. 


The top traded stocks by volume were FCMB (120.1 million units), ZENITH (82.9 million units) and ACCESS (79.8 million units) while GUARANTY (₦2.3 billion), ZENITH  (₦1.5 billion) and NIGERIAN BREWERIES (₦1.4 billion) led by value.
Sector performance was bearish as all indices under coverage lost save the Consumer Goods index which gained 1.7 per cent w/w as investors took position in UNILEVER (+17.4 per cent) and DANGSUGAR (+8.7 per cent). 
The Industrial Goods index lost the most after sell pressures in CCNN (-4.0 per cent) and WAPCO (-1.1 per cent) drove the benchmark south. 


The Banking and Insurance indices also shed 1.2 per cent and 0.9 per cent respectively, following losses in FCMB (-9.5 per cent), UBA (-5.0 per cent) and LAWUNION (-7.7 per cent). 
Similarly, the AFR-ICT and Oil & Gas indices trailed, down 0.9 per cent and 0.4 per cent respectively, owing to declines in MTNN (-1.7 per cent), OANDO (-3.7 per cent) and BOCGAS (-0.3 per cent). 
Investor sentiment as measured by market breadth (advance/decline ratio) fell to 0.6x from 0.9x recorded in the previous week as 19 stocks gained against 34 losers. ROYALEX (+17.4 per cent), UNILEVER (+17.4 per cent) and NIGERINS (+10.0 per cent) led gainers while CORNERSTONE (-20.3 per cent), ARBICO (-9.8 per cent) and IKEJAHOTEL (-9.7 per cent) led losers. In the coming week, we expect investors to cherry-pick stocks with sound fundamentals.


Global equities market performance dampened despite positive trade talks and OPEC+ Production Cut.
Trade optimism lingers as the two largest economies are in talks to finalise a phase one trade deal before the 15.0 per cent tariffs on $165.0 billion in Chinese imports kicks off in December 15, 2019. 
There are still odds over the size of Chinese agriculture purchases as President Donald Trump is asking China to purchase $40 billion to $50 billion of farm goods a year, higher than $8.6 billion bought last year. However, China has agreed to waive import tariffs for some soybeans and pork shipments from the United States. 


Elsewhere, OPEC and its allies (OPEC+) met in Vienna to agree on an oil production cut with the aim of propping oil prices. At the end of the Thursday meeting, there were indications that an additional 500,000 bpd cut may be agreed with the support of Russia, bringing total production cut to 1.7 million bpd.
Nonetheless, performance across the developed market was bearish. In the U.S., the S&P 500 and NASDAQ indices fell 0.7 per cent and 1.1 per cent w/w respectively, while the UK FTSE All-Share declined 1.3 per cent w/w. France’s CAC 40 index lost 0.7 per cent, due to a strike resulting from President Emmanuel Macron’s plan to rebuild the country’s pension system while Germany’s XETRA DAX index inched lower by 0.6 per cent. Conversely, Hong Kong’s Hang Seng and Japan’s Nikkei 225 indices rose 0.6 per cent and 0.3 per cent respectively to end the week. 


Across the BRICS, performance was bullish as three of five indices under our coverage closed in the green w/w save the South Africa’s FTSE/JSE All Share index that closed flat. The Brazil Ibovespa recorded the largest gain, up 2.8 per cent buoyed by lingering optimism over the US-China trade war and a better-than-expected GDP data. Likewise, the China Shanghai Composite trailed, inching higher by 1.4 per cent, riding on trade optimism and OPEC+ output cut while Russia’s RTS index rose 0.1 per cent to close the week. 
On the flip side, India BSE Sens was the lone loser, down 0.9 per cent following negative investors’ sentiment towards the central bank’s decision to maintain its repo rate. 


In Africa, performance was mixed as three of six markets under our coverage recorded losses w/w. The Egypt EGX30 index led laggards, down 1.6 per cent extending losses further while Morocco’s Casablanca MASI trailed, down 0.7 per cent. 
Likewise, the Nigeria All-Share Index fell 0.5 per cent, halting its four-week gains. On the flip side, Ghana’s GSE Composite rose 2.8 per cent, leading gainers while Mauritius’ SEMDEX Index and Kenya’s NSE 20 trailed, up 0.1 per cent apiece.
In Asia and the Middle East, performance was bearish as four of five indices trended southward w/w. The Qatar DSM 20 index led losers, down 2.0 per cent while Turkey’s BIST 100 index trailed, closing 1.9 per cent lower. 


Similarly, Saudi Arabia’s Tadawul ASI and UAE’s ADX General indices fell 0.6 per cent and 0.3 per cent respectively. Conversely, Thailand’s SET index appreciated 2.0 per cent to close for the week.

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