Market Update for October 29, 2018
Monday’s was a strong volatile session on the Nigerian Stock Exchange (NSE), as the week started positive, while extending three consecutive days of uptrend as more companies hastened to release their quarterly earnings reports ahead of midweek’s statutory deadline for submission of quarterly filings for the period ended September 30, 2018.
The numbers filed during Monday’s trading session showed mixed in performance, even as they came well below market expectations, especially the scorecards from bellwether stock- Nigerian Breweries, and Aiico Insurance, which further confirmed the impact of weak economic activities and dwindling productivity in the nation.
Market indices opened on the downside in the morning, oscillating up and down until midday, when it bounced up significantly by afternoon on the strength of price appreciations of high cap stocks in the banking and Industrial Goods sectors. The benchmark NSE All-Share index subsequently hit intraday highs of 33,200.37 basis points, from lows of 32,735.98bps, before pulling back to finish the session at 33,196.02bps. Volume Traded however remain low and has been declining over the last three trading sessions.
The benchmark index broke out the 45 Day Moving Average to test recent resistance level, while forming a double top or a breakout, depending on market forces in the next trading session.
The seeming uptrend had triggered a 3-wave, very sharp rally, taking the NSE up nearly 1% from the bottom to the top. It actually took back the entire loss at one point during the day, despite some profit-taking.
Market technicals for the day were positive, but mixed as volume traded was low amidst par market breadth and strong buying pressure, as revealed by Investdata’s Daily Sentiment Report, showing a buy position of 99% and sell volume of 1%. The volume index for the day’s total transactions was 0.68.
The energy behind the day’s market performance was further strengthened as more scorecards were released to the market, just as money flow index for the session attained a new peak since May 16, 2018, at 67.49bps, from previous day’s 59.68bps, an indication that funds are entering some stocks as the month and earnings season draw down.
Index and Market Cap
The NSE ASI ended the day’s trading with a gain of 288.74bps to close at 33,196.07bps, after opening at 32,907.33bps, representing 0.88% growth. Similarly, market capitalization was up by N105.41bn to close at N12.12tr, from an opening value of N12.01tr, representing a 0.88% value gain as bargain hunting increased at the peak of earnings season.
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Monday’s upturn was driven by buying interest in low, medium and high cap stocks like: Dangote Cement, Guaranty Trust Bank, Zenith Bank, UBA, FCMB, Wema Bank, Forte Oil, Honeywell and Transcorp. This impacted heavily on the Year-to-Date returns, which reduced the loss position to 13.07%, and market capitalization to N1.49tr, representing 10.86% drop, from the opening value.
Mixed Sectors Indices
Sectorial index performances were largely bullish, except for the NSE Insurance and Oil/Gas that closed red due to profit booking. Market breadth was flat as advancers are equalwith decliners in the ratio of 17:17, to continue three day uptrend.
Market activities were mixed as volume decline 4.31% to 150.5m shares, from previous 280.33m units, while value was up to N2.88bn, from previous day’s N1.96bn, with transactions boosted by trading in financial services stocks like: Zenith Bank, Guaranty Trust Bank, FCMB, FBNH and Fidelity Bank.
Consolidated Hallmark Insurance and Lasco Assurance were the best performing stocks, gaining 10% and 6.67% respectively to close at N0.33 and N0.32 per share, on low price attractions. On the flip side, Unity Bank and Diamond Bank losing 10% and 9.7each to close at N0.81 and N1.30 each on market forces and profit booking.
Market Outlook
Expect repositioning and short term profit taking as more companies present their numbers which has remained mixed in their performance and increased volatility to continue, if the numbers beat market and analysts forecast.
The ongoing Q3 earnings reports would assist investors and fund managers rebalance their portfolios, while watching the political space and analysing the actual numbers that will give insights into expectations for Q3 GDP and full year company earnings power. These are likely to drive prices north, or south, while determining market direction before or after Presidential Election.
Investors should review their positions in line with 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 volatile amidst mixed company, economic and market fundamental.
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info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
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