Market Update for March 22
Volatility on Nigerian equities market continued on Wednesday, with indices closing lower for the second day, on a low volume of trades as profit booking persisted in the amidst of mixed earnings performance and poor corporate actions in terms of dividend payout, when considered against the market value of companies that released their 2016 accounts.
The index opened to the upside slightly, pulled back to test low for the day before closing lower than it opened.
Stock markets around the world closed in the same direction with the Nigerian bourse, succumbing to pressure from sliding oil prices at the international markets, among other uncertainties that contributed to pull the markets down ensuring it finished mixed.
This is not to suggest that the market is irresponsive to the seemingly positive and gradual improvement already noticed in the Nigerian economy at this time. As time goes on and the positive indices start impacting Nigerians and businesses start looking up, the market will be there to validate the veracity of the economic data being churned out by the various bodies charged with doing so, when such begin to reflect in the numbers that hit the market over time.
This is why INVESTDATA RESEARCH believes it is time once again for a strong synergy between the fiscal and monetary authorities to help the private sector prosper as the economy remains on this path of recovery. This synergy should not be merely mouthed by way of policy statements, but doing the needful at the appropriate time to sustain progress already seen.
Happily too, the appreciation of the Naira against major currencies at this point is closing the gap between the official and black market rates and therefore reducing imported inflation as the nation continues to look inward for import substitutes and in the process become self-sufficient in some many of the food products particularly, thereby drastically reducing pressure on the nation’s foreign reserve.
At the close of Wednesday’s trading activities, the composite NSE All-Share Index shed 44.48 points to close at 25,514.09 points, from an opening figure of 25,558.57 points, representing a 0.17% decline on improved volume compared to the previous day’s figure. It was however lower than the average traded volume of the market. Similarly, market capitalisation for the day lost N15.39 billion to close at N8.83 trillion, from an opening value of N8.84 trillion.
The losses were impacted as a result of value shed in Unilever, UACN, International Breweries, Flourmills, Nestle, GTBank, Access Bank and Total Nigeria, thereby further increasing the All-Share index’s year-to-date negative position to 5.09%, while market capitalisation for the period adjusted to N491.43billion, representing 4.54% loss YTD, from the opening value.
Market breadth for the day remained negative and weak as the number of decliner’s outpaced advancers in the ratio of 23:15 to continue it bear run.
Market activities in volume and value were up by 29.96% and 68.67% respectively to 198.84million of shares from 153 million in the previous day and N2.53 billion, from N1.50 billion.
Financial services stocks like UBA, Guaranty Trust Bank, Access Bank, Diamond Bank and FCMB dominated the day’s activity chart as most traded equities by volume, as 45 million shares of UBA were crossed by foreign and local sellers, while 14 million shares of Guaranty Trust Bank equally changed hands during the day.

The NSE All-Share index and all sectoral indices closed lower, except for the NSE Industrial Goods and NSE Premium that were higher to end the day’s trading.

During trading the share price of Grief Nigeria Plc was adjusted for 60 kobo dividend, while Lafarge Africa and Stanbic IBTC released their 2016 full year earnings reports with dividend of 105 kobo and 5 kobo respectively.

Lafarge Africa led the advancers log with 5.26% to close N37.80, in apparent investor appreciation of its proposed dividend; followed by Julius Berger with 4.88% close at N41.95 on market forces; while Eterna topped the decliners log, shedding 5.00% to close at N3.02, and Unilever Nigeria, 4.76% to close at N32.30 per share.

NSEASI DAILY TIME FRAME

The index on a daily time frame is pulling back on profit booking after breakout of the falling channel on a strong volume now retracing down on low volume on negative sentiments as revealed by the sell/buy volume index of buy position of 28% while sell volume is 72%. The mixed earnings reports and market forces will determine the continuation of the trend or reversal.
The index candlestick formation pattern as at close of trade supports a bear move depending on the forces that play out this morning as market open. But funds are entering the market as indicated by MFI and the current trending ability of the market on a daily time frame is strong, as ADX is above 20 at 21.36, MACD still bullish since the last ten trading sessions, while RSI is reading 53.28 as at the close of trading.
Stocks to watch; Access Bank just formed a double bottom chart pattern that supports reversal, Aiico, Fidelity, Zenith, Ucap and Eterna look good