Finally, Equities Market Slides into Negative Territory after 11-day Bear Run
The stock market finally slipped into the negative territory yesterday after 11 days of sustained dominance by the bears. The selloffs, mostly in bellwether stocks, pulled the Nigerian Stock Exchange (NSE) All-Share Index 1.29 per cent lower to close at 38,104.54, while market capitalisation ended at N13.803 trillion. The market has consequently, entered into negative territory with a year-to-date (YTD) decline of 0.31 per cent. The market, which recovered from a three-year decline to a growth of 42.3 per cent last year, was projected to sustain the growth in the current year. Although, the market gained 8.5 per cent in first quarter (Q1), the bears took control since the beginning of the second quarter as investors reviewed their positions in many oversold stocks. As a result, the months of April and May posted negative performances, with May recording the steepest fall of 7.6 per cent, thereby pushing the market into negative zone yesterday. According to analysts at Meristem Securities Limited, the month of May has been on a bearish run, with the YTD return slipping into the negative region at the end of the month.
“Profit taking activities on bellwether counters in the consumer goods, banking and industrial goods spaces drove the market down today. This week, the market is on a path to a negative close, given the losses recorded so far on all trading days of the week,” they said. Also commenting, analysts at Cordros Capital Limited (CCL) said that continued selloffs call for cautious trading among investors in the short term.
“However, falling prices make room for bargain hunting in value stocks, as stillstrengthened macroeconomic fundamentals remain supportive of gains in the medium to long term,” they said.
CCL in its 2018 outlook economic titled “Nigeria in 2018: Looking Beneath the Surface” had favoured the equities market, saying when compared to the last two years, Nigeria’s macro outlook, wherein there are seemingly more tailwinds than headwinds, is more favourable to equities.