Equities drop to 3-month low after Buhari eyes re-election

 

Stocks dropped to a three-month low after President Muhammadu Buhari said he would seek re-election in 2019, ending months of speculation about his future after bouts of ill health.
The stock market, which opened on a losing streak after Lafarge Africa announced a surprise 2017 loss, worsened its decline. The equity market fell near 40,000 points.
The domestic bourse opened the week on a negative note, with the All Share index dropping by 1.01 percent to 40,429.18 points, as investors extended profit-taking in value stocks.
As a result, Investors lost N149.7 billion in value as market capitalization weakened to N14.6 trillion while year to date return moderated to 5.7 percent. Today’s negative performance can be attributed to sell-offs among large-cap stocks led by Dangote Cement (-1.1 percent), Unilever Nigeria (-8.0 percent) and Lafarge Africa (-7.2 percent). In line with market performance, activity level declined as volume and value traded trended lower, down 42.8 percent and 15.4 percent respectively. The top traded stocks by volume were FBN Holdings (29.6 million), Skye Bank (23.1 million) and FCMB (23.0 million) while Nigerian Breweries (N2.6 billion), Zenith Bank (N606.9 million) and Guaranty Trust Bank (N448.9 million) were the top traded by value.
Sector performance was largely bearish as 3 of 5 indices under our coverage closed southwards save the Insurance and Oil and Gas indices which closed downwards and flat respectively. The Insurance index closed up 0.9 percent on account of gains in AXAMansard Insurance (+5.0 percent) and Continental Insurance (+3.9 percent) while the Oil & Gas Index closed flat. The Industrial Goods index led laggards down 3.9 percent due to sell offs in Dangote Cement (-1.1 percent) and Lafarge Africa (-7.2 percent) following an underwhelming financial year 2017 result in the latter with a loss after tax of N34.6 billion. The Banking index trailed, down 0.9 percent, due to profit taking in Guaranty Trust Bank (-1.4 percent) and Zenith Bank (-1.5 percent). Lastly, the Consumer Goods index closed southwards, shedding 0.9 percent as losses in Unilever Nigeria (-8.0 percent) and Dangote Flour (-4.7 percent) accounted for this bearish performance.
Investor sentiment as measured by market breadth (advance/decline ratio) improved from 0.4x recorded in the previous session to 0.6x consequent on 17 stocks that advanced against 30 stocks that declined. The top performing stocks for the day were Learn Africa (+9.3 percent), Japaul Oil (+8.9 percent) and Champion Breweries (+8.8 percent) while C&I Leasing (-9.3 percent), Skye Bank (-8.5 percent) and Unilever Nigeria (-8.0 percent) led the laggards for the day.