Post Views: 172 Market Update for August 23 Nigeria’s stock market continued its volatility on Wednesday but closed positive, as technicals remained m...
Market Update for August 23
Nigeria’s stock market continued its volatility on Wednesday but closed positive, as technicals remained mix. The day began with a big gap up and then a pullback to support, which could not pull through, before bouncing back up to break through the resistance level again at the 37,000 psychological line after more than triple test of this level in the previous trading days as the market searched for direction. The index tried to rebound in the afternoon and indeed achieved a new nominal-session high above resistance at 37,059.21.
Market sentiment at the mid-week trading session was mixed as revealed by the volume traded index of 0.51. Buying position for the day stood at 68%, while selling volume was 32% of total transaction to maintain positive trend from previous day’s position as Access Bank released its half year earnings report with a 25 kobo interim dividend (just like last year) that met investing public expectation, as UBA, Stanbic IBTC and Fidelity Bank are underway with impressive numbers as recent scorecards have revealed.
Stock markets around the world were mixed despite the sustained rebound of oil price in the international market ahead of the meeting of Organisation of Petroleum Exporting Countries (OPEC) meeting and as U.S inventories had fallen consistently for eight weeks.
Meanwhile, the composite NSE All-Share index gained 96.73 basis points to close at 37,059.21 point, compared to the 36,962.48 points opening level, representing a 0.26% growth on a low volume traded, but higher than previous sessions when compared. Similarly, market capitalisation was up by N34.20bn to close at N12.77tr, from an opening value of N12.74tr, representing a 0.26% appreciation in investors’ position.
The upturn in the share prices of first tier banks and consumers goods like Nigeria Breweries and Dangote Sugar that impacted positively on the ASI’s year-to-date returns to 37.84%, just as market capitalisation stood at N3.50tr within the period, representing 38.04% above the year’s opening value.
Market breadth for the day was negative as decliners outnumbered advancers in the ratio of 21:17 on a low volume of trades to continue the two day bull transition.
Trading activities in terms of volume and value were up by 8.17% and 50.68% respectively at 264.29 million shares, worth N5.53bn, as against previous day’s 244.32m units, valued at N3.67bn.
Also, transactions in the shares of Zenith Bank, UBA, Guaranty Trust Bank, Access Bank and FBNH topped the volume chart.
At the end of the day’s trading session, Caverton topped the advancers’ table, gaining 9.52% to close at N1.10 each on market forces and positive Q2 numbers It was followed by Ucap with a 5.00% gain at N3.10 per share, on market forces.
On the flipside, Skye Bank lost 7.45% to close at N0.62 per share on profit taking and market forces; ahead of the 4.99% slide in the price of 7-Up Bottling Company to close at N92.00 per unit on profit taking and unimpressive Q1 numbers.
As trading activities open this morning, expect volatility to continue amidst profit taking and accumulation of interim dividend paying stocks ahead of their half year results, especially with the two first tier banks numbers giving insights into what should be expected. As investors also take advantage of correction to position for the rest of the year, if the much desired economic recovery becomes a reality despite the slow and unclear implementation of the 2017 budget by the government. Even so, the July inflation figures and Nigeria’s second quarter GDP data are being awaited from the Nigeria’s National Bureau of Statistics (NBS) to officially confirm economic state and direction.
However, investors need not panic if they take position based on strong numbers and future prospects of any stock. Since there is no bad news in the market.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of the improving economic fundamentals.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Be reminded once more that industry potential, market timing are very important when picking a stock, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry, especially now that the economy is recovering. Market is in phases know it in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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MR. OMORDION AMBROSE
CHIEF RESEARCH OFFICER
INVESTDATA CONSULTING LIMITED
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