290710: Market gains marginally as sell pressures mount on banking & petroleum stocks

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290710: Market gains marginally as sell pressures mount on banking & petroleum stocks

Transactions on the floor of Nigerian stock Exchange closed with marginal appreciations as sell pressures mount in some stocks. The appreciation recorded today was the least in the last eight trading days the bullish trend has been.

The sell pressures were most significant in the banking and petroleum marketing stocks as the two sectors topped the NSE-sectoral indexes depreciation trend. The top three decliners for the day were petroleum marketing and banking stocks in that order.

It was apparent that the decline could be attributed to profit takings by the investors from the previous rally that has since pushed NSE ASI upward by +4.52% and market capitalisation by N278.269 billion (US$1.859 billion) in the eight trading days the positive trend has been.

However, as against the negative outlook recorded in the food and beverages stocks yesterday, the sector rebounded to positive outlook very significantly at the close of trading session. In the same vein, insurance stocks also recorded positive price rally today to emerge the highest NSE-sectoral index gainer.

Meanwhile, both transaction volume and value on the bourse recorded higher figures when compared with their previous day’s data as against decline in both indices recorded yesterday. The rise in volume could be due to massive selloff as noted above.

The marginal appreciation recorded today should not come as a surprise to readers of our yesterday’s report (http://www.proshareng.com/news/singleNews.php?id=11551) where we made a call that sell pressures could increase today; just as we put investors on alert of the same possibility in our Monday report (http://www.proshareng.com/news/11501) and Tuesday report (- http://www.proshareng.com/news/11523). The trend seems to confirm our view eventually.

There may be more sell reactions in the market tomorrow, most especially in those sectors that recorded massive decline today, and hence the need for discerning investors to watch the trend very closely to see how the patterns unfold across the sector, most probably for exit at the right time.

The Central Bank of Nigeria (CBN) Governor has come to a conclusion that there was no cause for alarm after a critical review of the national economy. He was optimistic that the economy is, as expected has, steadily growing in Gross Domestic Product, pointing out that there has been moderation in inflation.

As usual, banking sector led the market transaction volume today with 157.659 million units valued at N1.228 billion (US$8.203 million) exchanged in 3,723 deals. Transactions in the shares of United Bank of Africa Plc and Access Bank Plc boosted the volume traded in the sector. The total volume of 33.899 million units valued at N335.961 million traded in the shares of the two banks accounted for 21.50% of the entire sector volume and their value represented 27.36% of the sector’s value.

The number of gainers at the close of trading session closed higher at thirty four (34) compared with twenty eight (28) gainers recorded on Wednesday, while decliners closed higher at thirty nine (39) compared with thirty two (32) decliners recorded yesterday. Market closed with 1:1.15 advancers to decliners’ ratio.

At the close of trading session, the All-Share Index inched up by +0.06% to close at 25,905.36 compared with appreciation by +0.10% recorded yesterday to close at 25,889.98. Market capitalisation also appreciated by N3.763 billion (US$25.136 million) to close at N6.335 trillion (US$42.321 billion) compared with appreciation by N6.398 billion (US$42.742 million) recorded yesterday to close at N6.332 trillion (US$42.296 billion).

SECTORAL REVIEW

Transactions in the Agriculture sector at the close of trading session ended with two one heavy loser to a gainer compared with two gainers recorded yesterday.

The share price of Nacho Plc gained further today while Air Service Plc share price remained at the previous closed price as against decline by -4.65% recorded yesterday.

The influence of bulls that assumed waning trend yesterday was consequently overpowered today as bearish run took toll in the sector. Transactions in the sector closed with fourteen losers to four gainers compared with eight gainers to eight losers recorded yesterday. The trend recorded could be attributed tom profit taking by the investors. The trend today confirmed the fact that speculative trading still exists in the banking stocks.

The bulls influence in the Breweries sector remained relatively as the transactions in the sector closed with a gainer to a loser compared with one gainer recorded yesterday.

The bulls consolidated hold in the building materials sector as transactions in the sector closed with four gainers and one unchanged compared with two gainers to two losers recorded yesterday.

Performance of stocks in the Conglomerate sector at the close of trading session remained positive as trading in the sector closed with two gainers to a loser compared with one gainer recorded yesterday.

The tempo in Construction sector dropped today as transactions in the sector closed with all prices closing at their previous closed compared with one loser recorded yesterday.

Positive outlook resurfaced in the Food & Beverages sector as the number of gainer rose to six compared with one gainer recorded yesterday while the number of loser dropped to one compared with five losers of the previous trading day. This confirms our view that stocks in the sector are viable for good returns.

The speculative swing still closed in favour of insurance stocks as the number of gainers closed higher at seven with one loser compared with six gainers to four losers recorded yesterday.

The outlook of Petroleum marketing sector closed on negative note three losers to two gainers compared with a gainer to a loser recorded yesterday. The two highest losers for the day are from the sector.

The total transaction volume at the close of market session today grew by +64.36% to close at 533.615 million units exchanged in 6,858 deals as against volume decline by -38.95% recorded yesterday to close at 324.656 million units exchanged in 6,979 deals.

In the same vein, market value inched up by +13.04% to close at N3.520 billion (US$23.518 million) as against value decline by -28.72% recorded yesterday to close at N3.115 billion (US$20.805 million). Seven-Up Bottling Company Plc, GlaxoSmithKline Plc, Tantalizer Plc and Unilever Nigeria Plc topped the gainers chart for the day with price appreciation by +5%. However, African Petroleum Plc and Mobil Nigeria Plc topped the losers chart for the day with –5% price depreciations.

The total volume traded in the shares of top five trades at the close of trading session stood at 313.944 million units valued at N796.673 million (US$5.322 million) exchanged in 744 deals. The volume and value of the top five trades for the day accounted for 58.83% and 22.63% of the market volume and value in that other.