Equity investors are beginning to lose hope in the equities market as the year draws closer to an end. Investors had started the year with high hopes as analysts had predicted a favourable performance of the market, especially in the second half of the year. The Group Chief Executive Officer, United Capital Plc, Mr Peter Ashade, had countered predictions, saying the stock market was looking for something to trigger a rally.
He said more pro-market policy pronouncements and reforms by the government were needed to bolster investor confidence in the domestic economy. He noted that the outlook for the equity market was not overly favourable as he expected performance to remain tepid in the second half in the absence of catalysts in the form of pro market policies and reforms that could spur renewed buying interest on the exchange.
Analysts at Afrinvest Securities Limited said on Tuesday that they did not expect a sustainable rebound in the equities market in the near term as investor sentiment towards equities remained sour. The market capitalistion of equities declined by N16bn at the end of trading on Tuesday the 17th of December, 2019 which brought the total losses recorded so far in the year to N2.05tn.
The benchmark index declined 13 basis points to settle at 26,660.44bps following selloffs in Dangote Cement Plc, International Breweries Plc and Lafarge Africa Plc, which dragged the year-to-date loss down to 15.2 per cent. Activity level advanced as volume and value traded surged by 94.6 per cent and 133.1 per cent to 331.916 million units and N4.8bn, respectively. Performance across sectors was bullish as four sectors recorded gains.
The banking index led gainers, up by 54bps due to gains in Access Bank Plc, United Bank for Africa Plc and Wema Bank Plc while the oil and gas index trailed, up by 15bps due to price appreciation in Oando Plc. The insurance and consumer goods indices also gained 0.08 per cent and 0.01 per cent, respectively, on the back of price upticks in Lasaco Assurance Plc, Guinness Nigeria Plc and Honeywell Flour Mills Plc.
On the flip side, the industrial goods index emerged the lone decliner, down by one per cent, owing to profit-taking in Dangote Cement Plc and Lafarge Africa Plc while the AFR-ICT index closed flat. Investor sentiment weakened further as the market breadth (advance/decline ratio) declined to 1.4x from the 2.1x recorded on Monday as 12 losers, led by Unity Bank, outperformed 17 gainers, led by Chams Plc.