Post Views: 772 Pix caption: Suspended Gwarzo (second left) and Oscar Onyema, chief executive of the Nigerian Stock Exchange (NSE) during the launch o...
Pix caption: Suspended Gwarzo (second left) and Oscar Onyema, chief executive of the Nigerian Stock Exchange (NSE) during the launch of the SEC Nigeria’s Statistical Bulletin during the Q2 Capital Market Committee (CMC) meeting on August 15, 2017 in Lagos, Nigeria
Market Update for November 29
The stock market index on Wednesday had a tough session as it remained volatile and good, consolidating momentum to close higher on high volume and strong technicals that supports short-term primary bullish market. The underlying trend extension was good, particularly on the buying pressure and market breadth that widened to reflect increased demand for stocks.
Trading started the day on a marginal gain in the opening hours, but pulled back a little in the mid-morning before the midday spike to reach intraday highs of 37,716.14 from lows of 37,466.50, before finally closing the day at 37,709.20 points.
The improving liquidity in the market should be sustained with the increase in oil price and low stock valuation as foreign portfolio investors inflows hit $4.1bn in Q3 2017, according to data from National Bureau Statistics (NBS) from half-year’s $2.7bn, representing the highest inflow in recent years. This has further revealed the confidence in the Nigeria’s foreign exchange market (FX) as CBN continued its intervention to make the market liquidity strong and stable for more than eight months with the nation’s external reserves in the up direction, moving from $26bn in December 2016 to $34bn as at October, with strong indication of climbing higher with crude oil price above $63. This is at a time the OPEC cartel is likely to extend its supply cut deal by nine months at its meeting on Thursday, November 30, since so far there is no plan to exit the strategy.
The volume index stood at 1.14 and buying position of 97%, and selling volume 3% of the total transaction to continue a two-day bull transition. The trend on Wednesday was good, but there is need for caution in this short primary bullish market. The sectoral indexes followed the path of the Composite index, except the NSE Insurance that was down.
Meanwhile, the composite index NSEASI gained 205.47 basis points to close at 37,709.20, from the 37,503.73 points, representing a 0.55% growth and similarly, market capitalisation went up by N71.56bn to close at N13.13tr from the previous day’s N13.06tr, representing a 0.55% value gain. The sustained market upturn for the day was driven by value gain in low, medium and high cap stocks like Nestle, ETI, Zenith Bank, UACN, Dangote Flour, Unilever and Forte Oil. Others include: FBNH, GTBank, Dangote Sugar,Cadbury, Fidelity Bank and Access Bank, which together impacted positively on the ASI’s year-to-date returns, taking it to 40.32%, just as YTD growth in market capitalisation stood at N3.89tr, representing a 42.08% rise over the year’s opening value.
Market breadth was positive as the number of advancers widened, outnumbering decliners in the ratio of 32:8 on a high traded volume that was lower than previous day’s level.
Activities in terms of volume and value were down by 59.92% and 0.28% respectively to 441.81m shares worth N4.8bn from previous day’s 1.1bn units valued at N4.8bn. The day’s transaction was driven by Wapic Insurance, Fidelity Bank, FBNH, Tantalizer Plc and FCMB to topped volume chart.
The best performing stocks on topping the advancers’ table were Fidelity Bank and Champion Brewery with gain of 9.94% and 8.74%, respectively to close at N1.99 per share and N2.24 per share.
On the flipside, Livestock shed a further 4.55% to close at N0.84 each on market forces and profit taking, ahead of Morison, which lost 3.57% to close at N0.55 each, also on market forces.
Being the last trading day of the month and outcome of OPEC meeting is underway, expect volatility to continue as traders take profit and balance their trading positions, which might influence price positively or negatively, depending on market momentum on the strength of liquidity and ahead of the year-end season. Also, a sentiment that may dominate Thursday’s trading session, besides the month-end portfolio rebalancing, is mid-week’s suspension of Mounir Gwarzo as Director-General of the Securities & Exchange Commission (SEC) and the setting up of an Administrative Panel of Inquiry (API) by the Finance Minister, Mrs. Kemi Adeosun, “to allow for an unhindered investigation of several allegations of financial impropriety leveled against the Director-General” and two of his allies. (READ).
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 stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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