Sell-sentiment on Insurance, Industrial Goods Sectors Drags Stock Market Lower by N51.03bn

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The Nigerian equities market yesterday closed transactions on a negative sentiment to halt the bullish sentiment of two consecutive trading sessions at the close of trade last Friday, as investors lost N51.03billion.

The downturn was buoyed by investors’ sell-sentiment on the Insurance and Industrial Goods sector.

In summary, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) dipped by 97.95 basis points, representing a decrease of 0.25 per cent, to close at 38,864.33 basis points from 38,962.28 basis points. Similarly, the overall market capitalisation value lost N51.03 billion to close at N20.25 trillion from N20.3 trillion it opened for trading this week.

The market negative performance was driven by price depreciation in large and medium capitalised stocks which are; BUA Cement, AXA Mansard Insurance, Guaranty Trust Holding Company (GTCO), Zenith Bank and United Bank for Africa (UBA)

This week analysts at GTI Securities Limited said that “We expect positive sentiment as expectation increases towards the compilation of third quarter (Q3) financial reports. Furthermore, investors will also track yield movement in the fixed income market.”

However, the market breadth closed positive, recording 20 gainers as against 12 losers. University Press recorded the highest price gain of 9.80 per cent to close at N1.12, per share. Transcorp Hotel followed with a gain 9.70 per cent to close at N5.43, while Courteville Business Solutions went up by 9.38 per cent to close at 35 kobo, per share.

Oando rose by 6.07 per cent to close at N5.24, while Cutix Plc gained 5.38 per cent to close at N4.90, per share.

On the other hand, AXA Mansard led the losers’ chart by 9.94 per cent to close at N2.99, per share. Chams followed with a decline of 4.35 per cent to close at 22 kobo, while Sovereign Trust Insurance lost four per cent to close at 24 kobo, per share.

Mutual Benefits Assurance lost 3.33 per cent to close at 29 kobo, while BUA Cement shed 2.94 per cent to close at N66.00, per share.

The total volume of trades decreased by 77.99 per cent to 139.453 million units, valued at N1.713 billion, and exchanged in 3,539 deals. Transactions in the shares of Sovereign Trust Insurance topped the activity chart with 19.079 million shares valued at N4.395 million. Fidelity Bank followed with 11.854 million shares worth N29.010 million, while Guaranty Trust Holding Company traded 11.146 million shares valued at N307.076 million.

Transnational Corporation of Nigeria (Transcorp) traded 10.051 million shares valued at N9.302 million, while Courteville Business Solutions transacted 7.952 million shares worth N2.680 million.

Cordros Securities Limited had stated that “We expect savvy investors to take advantage of the moderation in the share prices of bellwether stocks to make a re-entry in the week ahead.

“However, we expect intermittent profit-taking activities to persist as investors search for clues on the direction of yields in the fixed income (FI) market.

“Accordingly, we think the market will exhibit a choppy pattern. Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

Analysts at Afrinvest Limited noted that “In the coming week, we expect the momentum on the local bourse to remain elevated on improved investor sentiment.”

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