Market Update March 13, 2018

Nigeria’s equity market on Tuesday remained volatile, even as it marginally turned upside on a low traded volume with high buying pressure of 97% against selling volume of 3% as the investing public continue to reposition, with their gaze fixed on more corporate earnings expected to hit the market and impact prices positive, despite the mixed reactions to the numbers released so far.
The sluggish movement of the market in this recent uptrend could equally be attributed to the continued mop-up of funds by the Central Bank of Nigeria (CBN) as it works to check excess liquidity in the system through its Open Market Operation (OMO). The mop-up could have impacted the currency in circulation, which has so far dropped by N219.89bn or 10% from the festive season level (READ), regardless of the increasing foreign exchange inflows into the country according to CBN and NBS data.
The day’s trading started out with weak opening, reaching a recent low on the NSE Index at 42,801 basis points, before reversing in the mid-morning to afternoon to touch the day’s high of 43,081.56.
Market technicals for the day were weak and mixed, as revealed by institutional money flow index that dropped to 58.55 point from its previous level of 65.71 points on a seeming flat market with volume index of 0.79. This is an indication of low energy in the market, despite this been the middle of the earnings season that would enter its peak between now and month-end, ushering in scorecards of Q1 2018 as well, a situation that would enable investors know how far the listed companies and the economy have performed in the first quarter of the year.
Meanwhile, the composite index NSEASI closed with a marginal 16.91 points gain to close at 43,073.42bp after opening at 43,056.51, representing a weak 0.04% growth on low traded volume lower than previous day’s. Similarly, market capitalisation for the day went up by just N6.05bn to close at N15.41tr from an opening value of N15.4tr which also represented 0.04% value gain.
Tuesday’s seeming upturn was attributed to marginal price appreciation recorded by high cap stocks like: Dangote Cement, Total Nigeria, Nestle, UBN, Flourmills, Double one, Cadbury and FCMB, which together impacted positively on the NSE’s Year-To-Date returns to 12.63%, just as market capitalisation gains for the period improved to N1.8tr, representing 13.22% YTD growth.
The All-Share index and other sectorial indexes closed in the green, except for the NSE Banking and NSE Consumer Goods that were in red for the day due to the weight shed by big names in the banking sector, just like Dangote Sugar and Unilever combined to drag the consumer goods index down. Market breadth was negative as decliners outweighed advancers in the ratio of 39:26.
Market activities were down in volume and value by 50.94% and 42.12% respectively to 407.96m shares worth N6.12bn from previous day’s 831.39m units valued at N10.57bn.
Transaction volume for the day was boosted by financial services stocks like Zenith Bank, FBNH, Mansard, UBA and Skye Bank which witnessed increased trading to top the activity chart.
The best performing stocks were Cutix and Double One, which gained 6.12% and 5.5% respectively to close at N2.60 and N183.70 on market sentiment and 2017 earnings expectations, while Japual Oil and FTNCOCOA were the worst performers, shedding 8.3% and 6.5% to close at N0.88 and N0.29 respectively on market forces respectively.

Market Outlook

We expect the positive sentiment to resurface again after Tuesday’s pullback, on the strength of more impressive scorecards expected to hit the market in the days ahead, until the end of the week. Also expect volatility and strong recovery moves to continue, just like reduced profit taking at different times, depending on the expected numbers.
Also, expect repositioning to continue on the strength of expected payouts and earnings surprises, as well as the improved economic data and news, particularly data by the National Bureau of Statistics (NBS) showing that February inflation dropped to 14.33%, from 15.13% year-on-year. Also heartwarming is news that the Nigerian Senate has lifted its embargo on screening of Presidential nominees that gives way for the appointment of two Deputy Governors of the CBN and four members of the Monetary Policy Committee (MPC), which means the MPC could still meet this month, after missing the first meeting of the year in January to consider and fix the benchmark Monetary Policy Rate (MPR), among others (READ).
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing.
We advise investors to allow numbers guide their decisions while repositioning for the year’s trading activities, especially now that stock prices remain volatile 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. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Meanwhile, the Investdata equity trading and investment education train moves to Port Harcourt this month in line with its resolve to encourage and enhance the return of more retail investors to the Nigerian Stock Exchange (NSE) as a veritable instrument for mobilizing savings, wealth creation and redistribution.
At the Port Harcourt edition investment summit tagged: “Power of Earnings Season For Profitable Trading and Investing” we would be simplifying stock market investing is billed for Saturday, March 17, 2018 at Emerald Hotel Limited, Rumuola. From there, it moves to Abuja on Saturday, April 14, 2018.
As the Nigerian economy continues on its recovery path, participants would learn how to trade intelligently, beginning with setting investment objectives and applying simple tools to help decision making even on impulse.
A statement by Investdata quoted Mr. Ambrose Omordion, its Chief Research Officer as saying: “The training is also to help participants appreciate the changing pattern of the Nigerian economy since its emergence from recession, its effect on company fundamentals, which calls for new strategies for profitable investing. Investors are recovering from the recent market correction due to price decline suffered by equities over the past three weeks.
“Participants will learn how to effectively combine fundamental and technical tools for profiting from the market transformation, while protecting their capital.
“As independent research analysts, InvestData Consulting Limited will also unveil simple steps for surviving any market situation profitably and how to manage profit and loss positions using simple technical analysis tools. We would also be looking at equity investment in a pre-election year and beyond.”
Participants at the Port Harcourt and Abuja legs of the summit would learn how to be among the lucky 10% who manage to consistently play the stock market profitably on their own, guided by our simple trading strategies and buy & sell signal setup.
At Investdata we have been teaching investors simple and proven strategies which when implemented makes you a successful trader and investor in any market situation, especially when it comes to equipping you well enough to know how to protect you portfolios and profit from market corrections in a recovering economy.
We have also, over time, focused attention on attuning the mindset of investors and traders to managing risk, while eliminating emotions when trading so as to avoid irrational investment decisions.
At each of the events, all our stock trading and investing materials that will enhance the knowledge of participants and boost their returns on investment will be available at a discount.
As is our tradition, at our workshop of December 9, 2017, Investdata recommended the following 16 stocks to participants:

African Prudential Plc
Dangote Flour Mills Plc
Dangote Sugar Refinery Plc
Fidson Healthcare Plc
Fidelity Bank Plc
FBN Holdings Plc
Eterna Plc
Access Bank Plc
Dangote Cement Plc
Flour Mills of Nigeria Plc
Honeywell Flour Mills Plc
Presco Plc
Okomu Oil Palm Plc
Total Nigeria Plc
Unilever Nigeria Plc
Zenith Bank Plc

“An analysis of the stocks after four months and one week since December 9 when the summit in Lagos shows that Dangote Flour for example has returned 42.11% from N11.40 each to N16.20. This was after it touched a peak of N17.81 within the period, representing a 56.22% ROI; followed by Eterna, which chalked 35.63%, after its share price climbed from N4.35 on Friday, December 9, 2017, to N5.90 each, just as it recorded a high of 60% returns. FBN Holdings, another of the recommended stock climbed 26.39% from N9.02 per share to close at N11.40 on March 2, 2018, hitting a high of N15.16 each, or 68.07%; while Honeywell Flour notched 23.18%, after closing at N2.71 from N2.20 per share and attaining a price of N3.69, or 67.72% for investors and traders who exited at that price,” Omordion explained.
Also, he added that investors who followed Investdata’s advice to position in African Prudential have gained 22.36% from N3.98 per share at the beginning of the period to N4.87, attaining a 30.65% height within the period; just as investors in Unilever Nigeria creamed 23.89%, which makes it the stock that is closed to its peak during the period. Fidelity Bank’s shares have within the period appreciated by 12.45% to N2.80, but rose as high as N4.33 each, representing 73.89% RoI; while Fidson Healthcare returned 23.68% to close at N4.70, after reaching N5.05 per share, representing RoI of 32.89%; among others.
Two stocks in the pack however underperformed slightly, with Okomu Oil Palm lost 4%, opening for the period at N75.00 and falling to N72.00 per share, after attaining a height of N75.75; just as Flour Mills of Nigeria shed 4% from N35.00 to N33.60; after rising to N37.35 each.
That means a basket built around the above stocks has within the period, without doubt, yielded bountiful returns.

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