Market Update for November 8

Nigeria’s equity market on Wednesday had a very volatile session, but continued its uptrend despite the seemingly weak market breadth, closing higher on the strength of last minutes appreciation in the share price of Dangote Cement (which alone accounts for about one-third of total market capitalization), following which it traded above the psychological line of 37,000 level on a low volume that made technicals for the day weak and mixed.
During, the trading session price performance of banking stocks were mixed as the sector’s index, as well as the NSE Insurance closed lower.
The fact that the Tuesday’s presentation of a N8.6tr Appropriation Bill for 2018 had little or no impact on the market, could mean that investors are indifferent to the fiscal spending plan, given, like Investdata noted in its update of Tuesday, that the effect of the 2016 budget and the current one (2017) has not meant improved wellbeing for the average Nigerian, whose reserve of hope is daily thinning out in the midst of hunger and poverty. Could it be that investors and traders are waiting for the budget breakdown? After all, like they say, “the devil is in the detail!” We have also continuously harped on the implementation style of the government, which was also noted partly as reason for the downgrade of Nigeria’s sovereign rating by international rating agency Moody’s, even as it left the outlook as stable and positive (READ). It is fair to also note, however, the protest to the downgrade by members of the nation’s economic management team, especially the fact that the issues raised by Moody’s are not new and being resolved by the government.
Also important is the fact that Investors continue to digest the Q3 financials recently presented, while seeking to position ahead of the November 13 review of MSCI Frontier index, besides the anxious wait for release of the October inflation and Q3 GDP numbers.
The trading session opened on a positive note, which was sustained till midday before pulling back in the afternoon on selling pressure in some equities by traders, before reversing in the last minutes of the closing session on high cap stocks value gain, after touching intraday low of 36,965.05 to close at the day’s high of 37,138.97 and above the opening figure of 37,013.57.
The 100% buying pressure on a volume index of 0.69 with 0% selling position of the day’s total transaction revealed a sentiment that extended the bull market for the second day.
Meanwhile, the composite NSE All-Share Index gained 125.40 basis points to close at 37,138.97 from 37,013.57 points, which represented a 0.34% growth, just as market capitalisation went up by N43.4bn to N12.85tr, representing 0.34% value gain from previous N12.81tr.
The upturn recorded by medium and high cap stocks like Dangote Cement, FBNH, Dangote Flour, Guaranty Trust Bank and UBA impacted positively on the ASI’s year-to-date return, to 38.19%, just as market capitalisation growth YTD stood at N3.61 trillion, representing a 39.01% rise above the year’s opening value.
Market breadth for day was negative as the number of decliners marginally outnumbered advancers in the ratio of 19:18 on a low traded volume that was lower than previous day’s level to continue the bull transition.
Market activities in terms of volume and value were down by 36.60% and 37.80% respectively to 193.48m shares worth N1.81bn from the previous day’s 305.17m units valued at N2.91bn. Transactions in the shares of Diamond Bank, FBNH, Fidelity Bank, FCMB and Aiico topped the volume chart.
Best performing stocks at the end of Wednesday’s were International Brewery, which topped the advancers’ chart, gaining 10.24% to close at N45.20per share, on market forces; followed by Learn Africa’s 5%, to close at N1.05 on market forces and improvement in its Q3 numbers.
On the flipside, UACN Property, shed 4.71% to close at N2.83 on profit taking; followed by Law Union & Rock insurance 4.41% loss, to close at N0.65 per unit on profit taking and market forces

TODAY’S OUTLOOK
As the opening bell rings, we expect volatility to continue on the strength of portfolio rebalancing, profit taking and repositioning as the number of traders in the market remain in the increase ahead of economic data and year end changes
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 moving up and down amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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Ambrose Omordion
CRO | Investdata Consulting Ltd
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