Market Update for March 23
Monday’s was yet another very volatile session on the Nigerian Stock Exchange amidst uncertainties occasioned by the ravaging coronavirus pandemic which continues to shake economic fundamentals, dealing heavy blows on investor confidence as reflected in the stock market hemorrhage.
Measures put in place by the government to mitigate the spread of Covid-19 have been seemingly overwhelmed, leading to a rash of more stringent decisions, including the total closure of Nigeria’s air and land borders to human movement of any kind, in addition to limiting public gatherings to 50. The number of Covid-19 cases has reach reportedly hit 40 so far, while the Federal Executive Council meeting has been canceled, just like the Council of State meeting that involves governors of the 36 states and past presidents/heads of state.
There are worries on the global economic scene too, as crude oil prices continue to crash owing to the fact that factories and utilities mostly remain shut amid fear of depression which central banks are trying to avoid by injecting funds into critical sectors.
The unsavory situation is expected to dominate discussions and decisions at the ongoing second regular meeting of Central Bank of Nigeria’s Monetary Policy Committee which ends on Tuesday. Investors will be keen on other measures the committee would recommend in addition to those already put forward by the apex bank.
Monday’s trading opened on the downside and lasted throughout the session as selloffs resurfaced in the market in the midst of earnings reports from Fidelity Bank, Ecobank Transnational Incorporated, just as the NSE extended submission date for the 2019 audited accounts by 60 days.
The decline pushed the NSE All-Share index to an intraday low of 21,694.16 basis points, after breaking down the psychological line of 22,000 from its high of 22,208.81bps, before retracing up marginally to close the day lower at 21,700.98bps on low traded volume.
Market technicals for the session were negative and mixed, with volume traded higher than previous day’s amidst a negative market breadth and sentiments, as revealed by Investdata’s Daily Sentiment Report, showing ‘sell’ volume of 99%. ‘Buy’ position stood at 1% on total daily transaction volume index of 1.07, just as the energy behind the day’s performance was seriously weak, as Money Flow Index dropped to 16.40points, from the previous session’s 21.57bps. This indicated that funds exited some stocks and the market, reflect the fear of the gloomy economic outlook.

Index and Market Caps
At the close of Monday’s trading, the benchmark NSEASI lost 497.45bps, closing at 21.700.98ps, from its opening figure of 22,198.43bps, which represented 2.24% decline, just as market capitalization shed N259.23bn, closing at N11.31 trillion, from the N11.57 trillion opening level which also represented 2.24% value loss in investors’ portfolio.
Attention: If you have not signed up for Investdata buy and sell signal setup, don’t delay. We have just added another risk management feature and new stocks of most revered traders and investors in corporate Nigeria to our watchlist. These stocks are with double potentials to rally considering their current market prices.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current market recovery ahead of full-year earnings reporting season portfolio reshuffling and repositioning as we await an economic reform policy to stimulate and re-track the economy again.
Monday’s decline was driven by sell pressure in stocks like Guaranty Trust Bank, Zenith Bank, Access Bank UBA, NB, Dangote Sugar, FBNH, United Capital and Wema Bank. This expectedly impacted negatively on the NSE, increasing its Year-To-Date loss to 19.15%, while market capitalization loss stood at N1.65tr, representing a 12.73% decline over the year’s opening value.

Bearish Sector Indices
All the sectorial performance indexes were in red as NSE Banking led the decliners after losing 9%, followed by NSE Consumer Goods index with 3.61%, while NSE Insurance, Oil/Gas and Industrial goods shed 1.47%, 0.83%, and 0.79% respectively.
Market breadth was negative as decliners outnumbered advancers in the ratio of 25:9 while market activity in volume and value terms were up by 22.37% and 13.16% respectively, as investors exchanged 464.36m shares worth N3.87bn from the previous day’s 379.48m units valued at N3.42bn. This volume was boosted by trades in Zenith Bank, Guaranty Trust Bank, FBNH, Access Bank and UBA.
Neimeth Pharm and May/Baker were the best-performing stocks as they topped the advancers table, gaining 10% and 8.9% respectively, closing at N0.44 and N1.95 per share on low price attraction and a possible impact of the fact that they are among beneficiaries of the CBN’s intervention in the nation’s health sector as part of measures already taken to curtail Covid-19. On the flip side, Dangote Sugar and Nigerian Breweries lost 10% each, closing at N9.00 and N27.00 respectively on unimpressive numbers and panic selloffs.

Market Outlook
We expect the panic selloffs to continue, ahead of MPC meeting outcome today, as NSE extended the deadline for submission 2019 audited results by 60 days in the midst of investors expecting their dividend payment from the companies that postponed their AGM. The low price attraction as investors and traders review the impact of economic measures of the government and its economic managers. However, the high dividend yields continue to attract buying interests, while more audited corporate earnings hit the market going forward. This is despite the likely continuation of the mixed intraday movement in the midst of selloffs, with investors buying increased positions in undervalued stocks ahead of dividend declaration. This is also against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market, high inflation and unstable economic outlook for 2020.
Also, investors and traders are positioning in anticipation of the 2019 full-year earnings reports, amidst the changing sentiments in the hope of improved liquidity and positive economic indices which may reverse the current trend.
We see investors focusing on the upcoming full-year earnings season, targeting companies with strong potential to grow their dividend on the strength of their earnings capacity.
Again, the current undervalue state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation in the New Year.
This was noted in the 10 golden stocks and trading ideas for 2020, as discussed extensively during the Investdata 2020 Traders & Investors Summit held in Lagos.
Also, traders and investors need to change their strategies, because of the NSE’s pricing methodology, the CBN directives and their impact on the economy in the nearest future.
Meanwhile, the home study packs of our Invest 2020 Opportunities and Trade Ideas Summit, containing the 10 Golden Stocks for 2020 are available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08032055467, 08111811223 now.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
amberose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467