Market Update for Feb 13
Again, instability in the nation’s equity market continued on Monday, owing to the fast dwindling investor and consumer confidence in the socio-political and economic environment at a time there is yet no seemingly firm commitment to pull Nigeria out of recession.
Speaking at the first ever National Assembly Joint Public Hearing on the 2017 Appropriation Bill, Senate President Bukola Saraki, while listing its objectives to include: pulling the economy out of recession; investing in the Nigerian people; and laying the foundations for a diversified, sustainable and inclusive growth, lamented however that certain provisions in the Bill sent from the Executive for passage, are clearly off the path outlined.
There is the issue of the $1 billion Eurobond issued by the Federal Government at the international capital market to finance 2017 budget deficit, which investors, for the reasons already noted, came at a higher cost that that of Egypt.
Meanwhile, the first trading session of the week closed on a negative note to reflect the indecision and apathy among the investment community to the market and indeed the entire facet of the economy.
The composite NSE All-Share Index shed 95.73 points to close at 25,244.29 points after opening at 25,340.02 points, representing a decline of 0.38% on a low volume of trades. This was driven by depreciation in the prices of large cap stocks like Nigerian Breweries, National Salt, Stanbic IBTC, Oando, Access Bank and UBA, reversing the previous trading session’s marginal gain to continue the bear transition on negative sentiments. Buying position was 5% and selling volume, 95%, to close trading, just as market capitalisation fell by N33.13 billion to close at N8.74 trillion from its opening value of N8.77 trillion.
The NSE All-Share index year-to-date negative position thereby deepened to 6.09% on the strength of high cap stocks that lost value. Market capitalisation for the same period adjusted downward by N510.35 billion.
Market breadth was down and weak as the number of decliners outpaced advancers in the ratio of 17:15 on a bearish market.
Traded volume and value for the day were down by 30% and 46.72 % respectively, to 141.92 million shares from 201.73 million units; and N1.38 billion from N2.59 billion in the previous trading session.
Transactions in banking stocks like: Guaranty Trust Bank, UBA, eTransacts, Fidelity Bank and FBN Holdings dominated the activity chart as most traded equities by volume.
The NSE All-Share Index and all sectoral indices closed in the red, except for the NSE Premium, NSE Banking, NSE Industrial Goods, NSE OILGAS and NSE Lotus that closed in green.
At the end of the day, Beta Glass topped the advancers table with 4.99% to close at N34.72, on the decliners table, Transcorp led by 5.00% to close at N0.76. Also during the day trading the share price of Vitafoam was adjusted for 12 kobo dividend declare.
DAILY TIME FRAME NSEASI
The index on daily time frame has formed a descending triangle chart pattern and price action is at the point of breaking down the yellow line at the strong support level of 25,203.63 as mentioned in previous month.
The momentum and trending ability of the market on a daily time frame is strong, as ADX is below 20.
The odds of the market remaining in this direction is 50:50 as inflation figure for January and earnings reports are expected in the market any moment from now. With the high momentum of trend, the possibility of breakout is also high to confirm a weaker market. But due to indifference by many investors, a double bottom may likely form at this point also.
However, let us watch how market forces play out today. The index is trading below its shortest moving average. Also, at its oversold region with MFI looking down to indicate that funds are exiting the market.
