Stocks fall further as Q3’ 15 earnings display bleak prospects

Nigeria stock exchangeThe equities market closed yesterday on a negative note, as Nigerian Stock Exchange [NSE] All Share Index [ASI] depreciated by 0.14 per cent to close at 29,136.85basis points, compared with the 0.87 per cent depreciation recorded previously. Its Year-to-Date (YTD) returns currently stands at 15.93 per cent

Market breadth also closed negative as Aiico led 11 gainers against 27 losers topped by Transexpr at the end of yesterday’s session- an unimproved performance when compared with previous outlook.

Market turnover however closed positive as volume moved up by 20.05 per cent against 20.05 per cent decline recorded in the previous session. UBA, Zenith Bank and First Bank of Nigeria Holdings were the most active to boost market turnover. UBA and Zenith Bank topped market value list.

Volume shockers included Mansard which led the list of active stocks that recorded impressive volume spike at the end of yesterday’s session.

Meanwhile, the results declared by companies in the last few weeks showed drops in profits.

The Head, Research and Strategy, Elixir Investment Partners Ltd, Abiodun Keripe, explained to The Guardian that direct impact of poor

earnings releases on the equities market is an initial sell-off and depending on other variables can lead to a short-term withdrawal by investors and traders alike.

According to him, one case to stress is the outlook on key sectors. The analysts expect the banking sector (focus on tier-1 banks) to have a better performance on average relative to the consumer goods (given improved interbank liquidity conditions following the CRR

cut to 25 per cent) and the oil sector.

But he expressed cautious optimism on the industrial (cement) sector. However, according to him, the relative performance from the banking sector is not sufficient to lift the broad market.

’The overall market still requires a key catalyst which is liquidity though weak macroeconomic variables are also weighing sentiment down. The main driver of liquidity in the market are institutional
traders which are dominated by foreign portfolio trades. As we speak, there is not much of those foreign traders in the market’’, he said.



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