Market Update Jan 17
The equity market yesterday cave-in at end of the trading session as selling pressure increased on the ground that investors and traders are repositioning their portfolio to align with the companies that have strong earnings power to support dividend payout, as well as penny stocks for trading.
This is especially the time for stocks with high momentum and positive market sentiments, as investors exit most medium and high cap stocks likely to cut dividend payout or not paying anything at all in 2017. This has started affecting the share price of the stocks in that class amidst waning demand.
Also, investor concerns over the economic policy direction for the year, coupled with the anticipated policy changes with advent of the U.S billionaire, Donald Trump, who is to be sworn in on Friday as the country’s president, in addition to the impact of last year’s Brexit vote on the global economy.
As a result, the composite index NSEASI shed 95.63 points to close at 26,278.20 from an opening figure of 26,373.83, representing a decline of 0.36% on above-average trading volume. In the same direction, market capitalisation for the day lost N32.91 billion to close at N9.04 trillion from the opening value of N9.07 trillion, representing 0.36% drop.
This raised the NSE’s All Share Index Year-to-Date negative returns to 2.22%, just like market capitalisation for the same period fell by N205.21 billion.
Market breadth for that day turned negative as the number of decliners outweighed advancers in the ratio of 21:18 to usher in the bear and as point to the fact that profit taking has been activated.
The volume and value traded during the day rose by 113.79% and 45.85% respectively to 371.82 million and N1.71 billion from 174 million shares and N1.18 billion in the previous session. This was boosted by transactions in financial services sector stocks, especially the shares of Fidelity Bank, Continental Reinsurance, Diamond Bank, Sterling Bank and FBNH that topped the activity chart as most traded equities by volume.
The NSE ASI and sectorial indices were in the red, except for NSE Banking, NSE Insurance and NSE Industrial Goods that were in green, while NSE Asem was flat to close the day.
At the end of the day’s transactions, Unity Bank and Diamond Bank led the advancers side, rising by 5.08% and 5.04% respectively to close at N0.62 and N1.25, while 7Up and NEM led the decliners table with 5% and 4.71% loss to close at N101.5 and N0.81.
This pullback is likely to continue in today’s trading session as profit booking is under way and investors should always take advantage of it reposition at right support level.
NSEASI DAILY TIME FRAME
The index on a daily time frame continues its sideways ranging movement, trying to break out of the falling channel and symmetrical triangle chart pattern that supports continuation of trend, the reversal in buying volume as at yesterday’s trading signals profit taking. Once the blue dotted line is broken, it means hold cash until another support is found.
The trending ability of the market on a daily time frame is strong, as ADX is above 20, while the weekly is weak at ADX of 16.58
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Dividend stocks watchlist is Out.
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Stocks To Watch
7UP, ETI, Total, Aiico, Fidelity Bank and Presco
