NSE maintains losing streak on consumer goods, banks drag

The Nigerian Stock Exchange (NSE) contracted by 3.12 per cent last week as the All Share Index (ASI) and market capitalisation, the third consecutive weekly decline, as market capitalisation closed at N12.24 trillion and index receded to 35,504.62.

The decline followed increased selling pressure by investors who sought to cash in on profits recorded on the bourse before the bears resurfaced.

The waned weekly fortune of the bourse was underscored by losses in the consumer goods and banking sectors as month-to-date return dropped by 0.95 per cent, data from obtained from the website of the bourse revealed.

Analysts at Lagos-based investment firm Cordros Capital, said in their weekly market and economic report that last week’s market performance “broadly reflected the absence of any fundamental driver since the earnings season ended.”

According to the NSE data, the NSE Consumer Goods Index was the greatest loser, having shed 2.88 per cent compared to the previous week. Selloffs in Guinness, Nigerian Breweries (NB) and Unilever subdued the sector.

Guinness plunged by 7.36 per cent from the previous week, NB dropped 5.25 per cent, and Unilever declined by 4.87 per cent over the previous week as these stocks heralded a bearish sentiment that ran amuck across the sectors.

The NSE Industrial Goods Index was the next highest loser, dragged by declined fortunes from profit taking in Dangote Cement that lost 5.09 per cent compared to the previous week.  The NSE Banking index suffered a hit with a decline of 2.36 per cent as profit taking in UBA pushed the stock to give up 6.19 per cent from its price the previous week.

Gains recorded by some sectors of the market could not stem the tide of the bears, which continued their onslaught despite good showing by the Insurance and the oil and gas sectors.

The insurance index gained 1.90 per centre to come back from the loss recorded the previous week on the back of interest in Continental Insurance, Custodian and Allied Insurance, and Mansard Insurance that pushed the stock into the league of gainers with 13.95 per cent, 5.26 per cent, and 2.63 per cent surge.

Other gainers were Total and Seplat, whose shares jumped 13.01 per cent and 1.76 per cent, to the delight of investors in the oil and gas sector; the index posted a positive return last week, gaining 0.29 per cent versus the previous week.

The NSE traded for four days last week as the Nigerian Government had declared Friday Sptember 1 2017 and Monday September4 2017 as Public Holidays in commemoration of the Eid -el- Kabir Celebrations.

Some analysts predicted negative outlook for this week with the end of earnings season, adding that a rebound in the market may take a while to happen.

Ayodele Akinwunmi, head of research at FSDH Merchant Bank, said that the market may not see a resurgence of the in the next 2 to three weeks.

“Usually we see market going down   little bit in the third quarter of the year. But in the last two years we have seen a lot of appreciation between the month of August and September,” Akinwunmi said in a meadia chat in Lagos last week. “We see people positioning to take advantage of end of the year earnings season sometime around October or November.”

Philip Anegbe, research analyst at ARM said that the performance of the bourse will largely be subdued going forward as earnings for the remaining part of the year may not be as impressive as the first half.

“For the fourth quarter (Q4), we are not expecting earnings to be that strong,” Anegbe said in a media interview last week. “Second half of the year is not usually as strong as the first half.”

INNOCENT UNAH