Equities

Caution Among Investors Still, As More Q3 Come Below Expectation

Market Update for October 18

The nation’s stock market struggled on Wednesday, searching for direction as Q3 earnings numbers continued to trickle in to the market, even as scorecards so far released have come with mixed performance, while the ones that even came with seemingly impressive numbers are yet to receive positive market acknowledgement in terms of upward price movements.
Guaranty Trust Bank Plc, Nigeria’s biggest banking stock (by market capitalization) released its numbers for the nine-month ended September 30, 2017, which analysts agree were below market expectation also at the midweek. This reality is expected to reflect on its price performance as the market open this morning. The earnings report came with marginal decline in Topline, while bottom line moved slightly up as the bank needed to make far less provisioning for loan loss during the period (READ).
The trading session opened with the market index sliding down marginally in the early hours of the day, before continuing its back and forth movement till mid-day where it turned green, before slipping marginally into the red towards the last minutes of the afternoon trade, as profit booking continued in low, medium and high caps stocks.
Market traded volume was low with a stronger selling pressure as revealed by the volume index for the day that stood at 0.80, while buying position was at 11% and 89% selling volume of transactions to continue the down market just as market breadth turned negative.
It is gladdening to note the World Bank’s statement that it is with the Federal Government on the same page in terms of the need to step up the nation’s revenue drive that will support national economic growth and development, just as it commended the Central Bank of Nigeria (CBN) for its consistent intervention that had stimulated and driven the recovery so far. This has continued to attract foreign direct and portfolio investors into the economy at a time the exchange rate has remain relatively stable to allow investors plan their investment.
Meanwhile, the composite NSE All-Share Index shed 28.09 basis points to close at 36,641.52 from an opening figure of 36,669.61 basis points, which represented 0.08% decline, just as market capitalisation went down N9.67bn to close at N12.61tr, from the previous session’s N12.62tr, representing a 0.08% value loss in investors’ portfolios.
The downturn in the share prices of Zenith Bank, Access Bank, UBA, Total Nigeria, Flour Mills, Fidson Healthcare, FBNH and Dangote Sugar impacted negatively on the ASI’s year-to-date return, pulling it down to 36.34%, just as market capitalisation notched N3.37tr YTD, representing a 36.40% rise above the year’s opening value.
Market breadth on Wednesday was negative as the number of decliners outpaced advancers in the ratio of 21:13 on a volume traded that was lower than previous day’s level to halt Monday’s bull market.
Market activities for the day, in terms of volume and value, were down by 4.96% and 37.66% respectively to 198.63m shares value at N2.94bn from the previous day’s 211.96m units valued at N4.74bn.
Transactions in the shares of Guaranty Trust Bank, Zenith Bank, Access Bank, Dangote Sugar and Guinness topped the volume chart.
At the close of the day’s trading, Cutix topped the advancers’ table, chalking 9.09%, to close at N2.20 per share following the offer of 18 kobo dividend by its directors and market forces. It was followed by GSK’s 4.99% to close at N23.15 per share, also on market forces and expectations of its Q3 numbers.
On the flipside, Nahco Aviance lost 5.56% to close at N3.40 on profit taking activities, followed by Law Union & Rock Insurance, which shed 4.94% to close at N0.77 per unit on profit booking.
Also, the share price of Oando was placed on full suspension on the orders of the Securities & Exchange Commission (SEC), preparatory to a forensic audit (READ).

TODAY’S OUTLOOK
As the market opens this morning, expect volatility to continue in the midst of positioning and profit taking ahead of more earnings releases.
One thing that is clear in the current market situation is that smart investors are accumulating and enhancing their positions in selected stocks.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year trading activities, especially now that prices of stocks are looking down amidst improving economic and market fundamentals.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know it in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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