Sell-offs in some equities ensured that bears maintain their grip on the stock market last week. In what some analysts see as divestment, the market lost a handsome N344.7 billion in one week.
For instance, FIDSON lost 18.9 per cent of its share price, ETI shed 14.6 per cent of its share price, while the value of UACN depreciated by 14.4 per cent last week.
This translated to the Nigerian Stock Exchange (NSE)’s All Share Index (ASI) slowing down by 2.5 per cent on a Week-on-Week (W-o-W) basis to 26,987.45 points. Year-to-Date(YTD) loss worsened to -14.1 per cent. Similarly, market capitalisation declined by N334.7billion to N13.1trillion.
Also, activity level declined as average volume and value pared 24.7 per cent and 31.2 per cent to 165.2million units and N2.3billion respectively.
The top traded stocks by volume were GUARANTY (146.0million units), ACCESS (76.2million units) and FBNH (60.0million units) while GUARANTY (N4.0billion), DANGCEM (N908.3million) and NESTLE (N694.8billion) led by value.
The market closed red on the first trading day of the week due to losses in, MTNN, ETI, and UNILEVER. After the public holiday on Tuesday, trading resumed with the ASI declining 1.1 per cent and 0.8 per cent on Wednesday and Thursday respectively due to sell pressures in GUARANTY, NIGERIAN BREWERIES, NESTLE and ZENITH. On Friday the local bourse also ended in the red territory as it lost 0.4 per cent.
Afrinvest analysts said, performance was mixed across sectors under our coverage W-o-W. The Consumer Goods index led the laggards, shedding 4.9 per cent W-o-W on the back of selloffs in UNILEVER (-7.9 per cent) and NESTLE (-6.7 per cent). Trailing, the Oil & Gas and AFR-ICT indices pared 2.2 per cent and 2.6 per cent W-o-W respectively following price depreciation in MRSOIL (-9.8 per cent), CONOIL (-9.2 per cent) and MTNN (-4.4 per cent). Also, the Banking index was down 3.9 per cent W-o-W due to price depreciation in ETI (-14.6 per cent) and ACCESS (-5.9 per cent). Conversely, the Insurance and Industrial Goods indices gained 5.7 per cent and 0.1 per cent W-o-W respectively as buying interest in CONTINSURE (+20.1 per cent) and CAP (+9.9 per cent) buoyed the indices.
Investor sentiment as measured by market breadth (advance/decline ratio) weakened at 0.4x from 0.5x as 15 tickers gained against 37 that lost. The top gainers were CONTINSURE (+20.1 per cent), LAWUNION (+12.8 per cent) and NIGERINS (+10.0 per cent) while FIDSON (-18.9 per cent), ETI (-14.6 per cent) and UACN (-14.4 per cent) led the decliners.
“We expect the bears to sustain their grip on the market in the absence of a catalyst to boost sentiment”, said Afrinvest.
Meanwhile, trade spatweighed heavily on US-EU on investors’ sentiment.
Recent developments in trade protectionism and Brexit suggest that the global economy faces an increasing cloud of uncertainty which could further dampen growth. This week, the US announced plans to impose 10.0 per cent tariffs on European made aircraft and 25 per cent duties on wine, whiskies and cheese due to illegal EU aircraft subsidies. The tariff could affect as much as $7.5billion worth of EU goods and this is expected to be implemented by 18th October 2019. As the deadline for Brexit draws closer, UK Prime Minister Boris Johnson announced that the UK will table a “constructive and reasonable proposal” to the EU. However, he hinted that the rejection of the new proposal would lead to a “no-deal” Brexit.
There was a bearish market performance in the developed market as all 7 indices under our coverage trended southward partly due to trade uncertainties. The US’ S&P 500 and NASDAQ indices dipped 1.2 per cent and 0.3 per cent W-o-W respectively while Hong Kong’s Hang Seng index declined by 0.5% amid continuous protests in the country. The UK’s FTSE All Share index declined the most at -3.6 per cent W-o-W amid fears of a “no-deal” Brexit. Furthermore, France’s CAC 40 index was down by 3.0 per cent W-o-W while Germany’s XETRA DAX and Japan’s Nikkei 225 indices plunged 3.4 per cent and 2.1 per cent W-o-W respectively following the release of the US ISM manufacturing index which was below expectations.
Similarly, the BRICS market recorded a bearish outing as all 5 indices under our coverage ended in the red region. Brazil’s Ibovespa topped losers after losing 3.5 per cent W-o-W while India’s BSE Sens index also dipped 3.0 per cent W-o-W. Furthermore, Russia’s RTS and South Africa’s FTSE/JSE All Share indices waned 2.8 per cent and 2.1 per cent W-o-W respectively while China’s Composite index declined by 0.9 per cent W-o-W.
In the African market, performance was bullish as 4 of 6 indices gained W-o-W. Egypt’s EGX 30 index led gainers, up 2.6 per cent W-o-W while both Kenya’s NSE 20 and Mauritius’ SEMDEX indices were up 0.3 per cent and 0.2 per cent W-o-W respectively. Ghana’s GSE Composite also gained 1.3 per cent W-o-W. On the flip side, Nigeria’s ASI and Morroco’s Casablanca MASI indices were down 2.5 per cent and 0.7 per cent W-o-W respectively.
In the Asian and Middle East market, performance was bullish as 5 indices under our coverage closed in the green territory. Thailand SET index led gainers with 2.4 per cent W-o-W, trailed by Turkey’s BIST 100 index which rose 1.7 per cent W-o-W. Furthermore, Saudi Arabia’s Tadawul ASI, Qatar’s DSM and UAE’s ADX General indices all gained 1.4 per cent, 1.1 per cent and 0.8 per cent W-o-W respectively.
