Equities market reacts negatively to political developments

The Nigerian equities market reacted negatively to the prevailing political climate in the country as the as the All Share Index (ASI) declined 0.71 percent to close at 32,244.24 points following continued profit taking in Zenith (-3.5%), Unilever (-4.7%) and Oando (-9.7%).

Consequently, investors wealth decreased N85.6 billion to N12.0 trillion while year-to-date gains were reduced to 2.6 percent.

However, activity level strengthened as volume and value traded increased by 41.6 percent and 10.1 percent to 456.1 million units and N2.7 billion respectively.

The top traded stocks by volume were Diamond Bank (187.4m units), Fidelity Bank (45.1m units) and Access Bank (33.1m units) while Diamond Bank (N466.7m), Zenith (N245.8m) and Guaranty (N242.7m) led the top traded by value.

Performance across sectors was largely bearish as 4 of 5 major sectors trended southwards.

The oil & gas index declined the most, down 1.7 percent on the back of losses in Oando (-9.7%) and Eterna (-7.4%).

In the same vein, the Banking, Consumer Goods and Industrial Goods indices declined 1.4 percent, 0.7 percent and 5 basis points respectively based on sustained profit taking in Zenith (-3.5%), Diamond (-2.0%), Nestle (-1.0%), Unilever (-4.7%) and WAPCO (-0.7%). On the flipside, gains in Cornerstone Insurance (+4.6%) buoyed the Insurance index (+0.1%).

Investor sentiment worsened as market breadth showed 10 stocks advanced against 30 decliners.

Neimeth (+9.8%), PZ Cussons (+9.3%) and Nigerian Police Force Microfinance (+8.7%) were the top gainers today while Union DAC (-9.7%), Oando (-9.7%) and Wema Bank (-8.2%) declined the most.

Following the conclusion of the 2019 presidential elections, analysts at Afrinvest advise investors to take position in fundamentally good stocks trading at cheap prices as they expect improved earnings to buoy performance in the near term.