Nigeria Daily Market Report | Bears Resurface on Customs Street… ASI down 0.2%

Photo Credit: NGX

Domestic Equities: Bears Resurface on Customs Street… ASI down 0.2%

In line with our expectation, NGX-ASI shed 0.2% to 99,630.51 points following selloffs on MTNN (-4.0%), ETI (-2.5%) and NASCON (-9.9%). Consequently, YTD return declined to 33.2%  (previously: 33.5%), while market capitalisation fell 0.2% to ₦56.4tn. Activity level varied as volume traded declined 11.9% to 849.0m units while value traded rose 22.6% to ₦16.6bn, respectively.

Positive Sector Performance

Performance across our coverage sectors was positive, as five indices gained while one lost. Leading the pack, the Oil & Gas and Insurance indices grew 2.1% and 1.2% sequentially, on the back of price appreciation in TOTAL (+10.0%), SEPLAT (+0.3%), LINKASSURE (+9.1%) and WAPIC (+4.4%). Following, demand on GTCO (+2.6%), ACCESSCORP (+1.9%), NB (+3.6%) and GUINNESS (+8.4%) fueled gains of 0.7% and 0.1% in the Banking and Consumer Goods indices respectively. Similarly, the Industrial Goods index rose 1bp spurred by buying interest in CUTIX (+8.8%). On the flip side, the AFR-ICT index shed 1.5% due to losses on MTNN (-4.0%).

Outlook

Investor sentiment, as measured by market breadth, waned to 0.13x (from 0.24x) as 29 stocks advanced, 19 declined, while 77 closed flat. Upon resumption from tomorrow's public holiday (Nigeria's Democracy Day), we expect bears to sustain dominance on the bourse owing to the persistent risk-off sentiment.

Corporate Action

Today, Guinness Nigeria Plc ("Guinness" or "The Company") announced plans by Tolaram Group to acquire a majority 58.02% stake in its business from Diageo (its parent company). Based on the terms agreed, Diageo will retain and license the Guinness brand to Guinness Nigeria, as well as lead brand and marketing strategy. Consequently, Tolaram Group will secure a long-term licensing and royalty deal to produce Guinness and other Diageo brands. The transaction is subject to regulatory review and is expected to be concluded in the 2025 fiscal year. Tolaram Group has joint ventures with Colgate, Kellogg, and Arla in Africa. Following the announcement, GUINNESS recorded an 8.4% price uptick at the close of today’s trading.