Market Update for July 30, 2018

As has become normal, Nigeria’s equity market had another very volatile, but positive session on Monday to consolidate the three-day back-to-back gains at the peak of earnings season and month end window dressing of trading account balance by market players.
The surprising earnings reports that hit the market during the session fueled the positive reactions as demand for some equities increased and impacted price.
As the Q2 earnings reporting season officially closes on Tuesday, many more companies will embark on last minute presentation of their accounts. Despite the generally mixed performance as revealed by the quarterly numbers released so far. Service providing companies, including banks, insurance, aviation and some others posted impressive numbers to support their share prices, especially at the prevailing low-price regime that is system induced. Also, the economic slowdown and political uncertainties are not helping matters.
The improved performance recorded by majority of banking stocks that have released their numbers is giving insights into what the market should expect from first-tier banking stock that pay interim dividend in the month of August. This is because of the need to audit their accounts and get the approval of the Central Bank of Nigeria (CBN).
However, the index opened the trading session with a little gap up in the morning which was sustained till mid-morning to afternoon and extended wave 5 motive that ensued right from the opening to close positive, from intraday lows of the day opening of 36,636.97basis points, before attaining highs of 36,946.18 basis, on a relatively high volume traded.
Monday’s market technicals were positive and strong as volume traded was relatively high in the midst of positive market breadth and sentiments as revealed by Investdata’s Daily Sentiment Report, showing a ‘buy’ pressure of 100% and ‘sell’ volume at 0%. Volume index was 1.08 of the day’s total transactions.
The energy behind the day’s market performance improved despite the low liquidity, as reflected in the money flow index at 29.79 points, an increase from previous day’s 26.67points, indicating that funds are entering the market as end of the month trading account balance coincide with end of earnings season.

Index and Market Cap
The benchmark index for the session gained 309.68 basis points, to close at 36,946.118 basis points, after opening at 36,636.97bps, representing a 0.84% growth, while market capitalization climbed by N111.97bn to close at N13.38tr from an opening value of N13.27tr, also representing 0.84% value gained for the day.
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The upturn was attributed to values by stocks like: Nestle, Seplat, NB, Guaranty Trust Bank, UBA, Oando, FBNH, ETI, Flormills, PZ Cussons, UBN, Forte Oil, Dangote Sugar and Transcorp. This impacted positively on the NSE’s Year-to-Date return, reducing its negative position to 3.46%, just as market capitalization decline within the period dropped to N289.21bn, same as 1.27% below the year’s opening value.

Bullish Sector Performance
Sectorial performance on Monday was largely bullish, except for NSE Insurance and Industrial goods that closed lower. Market breadth was positive as the number of advancers outnumbered decliners in the ratio of 31:22, to continue the three-day bullish transition.
Market activities were down in volume and value by 53.02% and 21.79% respectively to 319.4m shares worth N3.05bn, from the previous day’s 679.92m units valued at N3.9bn.
Transactions for the day were boosted by trading in financial services, airline service and conglomerates stocks, Medview Airline, Sterling Bank, UBA, Transcorp and FCMB that witnessed increased trading to top the activity chart.
Mutual Benefits Assurance and Seplat were the best performing stocks for the day, topping the advancers’ table, after gaining 10% each, to close at N0.53 and N687.5 each due to market forces and impressive Q2 numbers
On the flip side, Pharma Deko and Conoil were the worst, losing 10% each to close at N1.98 and N24.30 on profit taking and market forces.

Market Outlook
We expect the trend to continue as today is the last trading day month and end of earnings season, as more Q2 earnings reports expected in the market during trading, since the market is trading to break over the 20-Day Moving Average. Looking at the actual numbers released so far which will determine direction as more disappointing reports will drive the market further down or reversal if numbers beat expectation. Also important, is the outcome of the shadow elections by political parties taking place in the month of August. 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, especially during this season were Q2 interim dividend payment are expected in the market arena very soon.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamental.

APPRECIATION
The management of Investdata Consultants Ltd wishes to appreciate all participants and facilitators that made it to the Investdata Midyear Comprehensive Stock Trading and Investing Workshop on Saturday, July 28, 2018.
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Ambrose Omordion
CRO|Investdata Consulting Ltd
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Tel: 08028164085, 08032055467