Stock Market Closes Negative Amidst Rising Inflation
The Nigerian stock market closed negative for the third consecutive week as the nation’s macro-economic indicators continued to worsen as inflation figures released by National Bureau of Statistics (NBS) for the first month of 2017 rose to 18.72 per cent year on year from 18.55 per cent in December.
The deteriorating confidence in the entire socio-political and economic environment is being fuel by negative indices and policies of the economic managers with their implementation style that bought recession to the nation.
For last week, the All Share Index (ASI) depreciated by 175.11 points or 0.69 per cent to 25,164.91 points, while year-to-date loss increase to 6.36 per cent. Also, the market capitalisation declined by N61 billion week-on-week to close at N8.709 trillion.
Stock market analysts noted that, “Sentiments remain low, with the ASI reaching a nine-month low on Tuesday. Contrary to our speculation, the local traders did not ride on the news of the successful Eurobond issue to stir a ‘noisy rally’ on the local bourse.
Although investors continued to purchase trusted names in equities, high subscription rates at the recent treasury bills and bond auctions highlight continued strong preference for risk free assets.”
Sector performance remained mixed but largely bearish. Similar to the preceding week, investors continue to dump Consumer Goods stocks as the index tumbled by 4.6 per cent week-on-week on losses in Nigerian Breweries and Nestle. The Insurance index trailed, losing 1.8 per cent as Mansard Insurance and Continental Reinsurance shed points.
The Banking index also lost 0.4 per cent as a result of negative sentiment towards Stanbic IBTC and Diamond Bank. On the contrary, the Oil & Gas index appreciated 1.6 per cent as gains in Forte Oil and Seplat drove the index higher. Likewise, the Industrial Goods index advanced 0.7 per cent as the share prices of Dangote Cement improved during the week.
Stocks Activities Movement For The Week
With a bearish start in the week, the All Share Index (ASI) posted back-to-back losses, shedding 0.38 per cent on Monday and 0.84 per cent on Tuesday, with the latter being the largest loss recorded last week, losing in three out of five sessions.
Market breadth was positive, with 27 gainers versus 25 losers. Total volume traded increased by 1.97 per cent to 1.07 billion shares, with Staco Insurance, Zenith Bank and Guaranty Trust Bank accounting for 44.16 per cent of total volume. Total value traded increased by 7.19 per cent to N8.61 billion with Guaranty Trust Bank, Zenith Bank and Nigerian Breweries accounting for 58.94 per cent of total value.
Outlook For This Week
Analysts at Cordros Capital said, “With three losses in a row, we expect bargain hunting to drive market momentary recovery this week. That said, visibility on the drivers of fundamental and sustainable recovery remains very low.”
While analysts at Afrinvest Limited, said “Sentiments on equities remain driven by low expectations on corporate earnings, most especially in the Consumer Goods space. Despite cheap valuation, a near term rebound is not expected until full year, 2016 earnings start trickling in.”
