Volatility May Persist On NGSE, As Investors Reposition Ahead Of General Elections

Volatility May Persist On NGSE, As Investors Reposition Ahead Of General Elections


Post Views: 404 Market Update for January 22 It was a mixed session on the Nigerian Stock Exchange on Tuesday as the benchmark All-Share index closed ...

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Market Update for January 22

It was a mixed session on the Nigerian Stock Exchange on Tuesday as the benchmark All-Share index closed flat on a low traded volume with increasing buying interest in medium and low cap stocks that appreciated in value, ahead of their 2018 full year scorecards to halt previous day’s down market.
The ASI opened with a gap down in the morning, after which it continued downward till early afternoon forming a bear flag, before retracing back in the late afternoon as outcome of the first Monetary Policy Committee (MPC) meeting began to filter in. This was after the index touched intraday lows of 30,485.34 basis points from its high of 30,811.19bps, with the session finishing slightly up with mixed technicals that signaled resistance to any further decline.
As envisaged, the Central Bank of Nigeria (CBN) MPC members left all monetary instruments unchanged by a unanimous decision, adducing reasons like headwinds ranging from global economy uncertainties, insecurity threatening agricultural produce, oscillating oil price, political spending and tension (READ MORE). Members noted the decline in banks’ non-performing loans in 2018, which is a plus for the sector, despite the fact that some are still carrying huge burdens, but if the government will continue to pay contractors and oil price rebound. Good enough, these will further boost banks’ numbers going forward and impact positively on their payout.
Also, the resolution of the MTN issue will attract inflows as the export and investor window of the exchange market remained stable.
But the government’s continued dominance of the financial market will keep the economy struggling, because the rate at which the sovereign is high and many corporate bodies, or companies cannot afford to approach the market at that same interest rate.
Meanwhile, market technicals were positive and mixed as volume traded was lower than previous day’s in the midst of a positive breadth and sentiment as revealed by Investdata’s Daily Sentiment Report, showing buy position of 77% and 23% sell volume. Volume index for day’ was 0.72.
The energy behind the day’s market performance was weak and flat, despite the positive sentiment, as reflected in the 35.57bps money flow index, from previous day’s 35.83bps, an indication that funds are entering some stocks.

Index and Market Cap
At the end trading on Tuesday, composite index NSEASI gained marginal 4.16bps, to close at 30,736.88bps after opening at 30,732.72bps, representing 0.01% up; while market capitalization slide up by N1.55 billion, closing at N11.46 trillion from the opening value of N11.46 trillion, representing a 0.01% value gain.
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The seeming flat session were driven by price appreciation of low and medium cap stocks like Dangote Flour, Oando, Transcorp, Nahco, Caverton, Custodian Investment, Fidelity Bank, Linkage Assurance, Redstar Express and Lafarge Africa among others, thereby slightly reduce Year-to-Date loss to 2.21%. Also reduce the loss position of market capitalization to N260.21bn, from the year’s opening level N11.72tr representing a 2.21% decline.

Mixed Sectors Indices
All sectoral performance indices were largely bullish, except for the NSE Industrial that closed in red on profit taking, while market breadth was positive, with advancers out numbering decliners in the ratio of 26:10. Market activity were down in volume and value by 50.71% and 55.83% respectively to 245.76m shares worth N2.44bn from the previous day’s 499.21m units valued by N5.5bn. Transactions were driven by financial services stocks: Diamond Bank, Access Bank Guaranty Trust Bank, UBA Bank, NEM Insurance, and FBNH.

Market Outlook
We expect the pullback to continue in the midst of sustained volatility, as investors continue to reposition for 2019 dividend declaration season that will shape market performance after the elections. We advise cautious trading and investing why positioning in fundamentally sound equities.
The ongoing volatility will persist as investors and fund managers reposition their portfolios, with eyes fixed on political space and ahead of full year company earnings position and post-election market dynamics. These are likely to drive prices north, or south, while determining market direction before or after the Presidential Election.
Investors should review their positions in line with their investment goals, strength of the company numbers and act as events unfold in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value,
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals.

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Venue: Emerald Hotel, 193, Aba Road Rumuola, Port Harcourt, Rivers State,
Date: Saturday 26, January 2019,
Time: 10.am.
Registration Begins at 9.am prompt
Admission is free
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Review of 2018 market performance
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Sector by Sector Analysis and projections
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Ambrose Omordion
CRO|Investdata Consulting Ltd

Tel: 08028164085, 08032055467