Market Update for March 11
Nigerian Stock Exchange’s composite index had another volatile down session on Monday to kick start the week on a negative, while extending the bearish sentiments to the fourth consecutive day of pullbacks. This was as market players continued to digest the recent corporate earnings in the midst of low liquidity and the already rattled investor confidence.
Trading for the day started out on a downside movement in the morning, with the index bouncing around all day, before finally closing the session lower on a low traded volume after touching intraday lows of 31,636.66 basis points, from highs of 31, 792.81bps. The prevailing negative sentiments over the weeks were supported by few happenings such as the missed forecast of the presidential poll winner, low liquidity in the equity market and the seeming lack of direction with the government yet to roll out its economic policy and reforms which would propel growth and development, while attracting smart money and local investors. This is because major factors driving the nation’s stock market depend on foreign investors entering and exiting. Worse still is the fact that there is no hope yet that the 2019 budget could be passed by the eight National Assembly before the May 29, end of its lifespan.
Consequently, playing dividend stocks remain the option for many traders and investors, with all their eyes on the qualification and markdown dates to guide movement of funds from one to the other.
Monday’s market technicals were negative but mixed, with lower transacted volume in the midst of negative breadth and very high selling pressure, as revealed by Investdata’s Daily Sentiment Report, showing a 100% sell position and 0% buy volume on a daily transaction volume index for the day at 0.36.
The energy behind the day’s market performance were down sharply, reflecting the negative sentiments as shown by the money flow index at 37.46points, from previous day’s 43.86bps, indicating that more funds are leaving the market and some stocks.
Index and Market Cap
The NSE benchmark All Share index (NSEASI), at the end of the day trading session shed 287.85 points to close at 31,636.66bps from 31, 924.51bps, representing a 0.90% decline; while market capitalization lost N107.34bn to at N11.80tr, from an opening value of N11.91tr, also representing a 0.90% value loss.
Attention: Join Investdata buy and sell signal setup to get all our in-depths analysis on the picture and to get access to our carefully created watch list. To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. The number of stocks on our watchlist has increased due to the prolonged market correction. Take advantage of this service to buy right and sell right during this earnings season and beyond.
The continued downturn was driven by selloffs in medium and high cap stocks like, Nestle Nigeria, Okomu Oil, Dangote Flour, International Breweries, Lafarge Africa, ETI, UBA, UBN FCMB and Transcorp, among others. This impacted negatively on Year-to-Date gains, which reduced to 0.66%, and market capitalization, N340.83bn from the year’s opening level of N11.72tr, representing a 0.66% growth.
Bearish Sector Indices
All the sectoral performance indices closed lower, except for the NSE Oil/Gas that was flat, just as market breadth remain negative as decliners outnumbered advancers in the ratio of 19:14.
Market activities were mixed with volume down by 44.57% to 128.38m shares from 233.29m units last Friday, while value rose marginally by 5.08% to N2.39bn from the previous day’s N2.27bn. Volume was driven by financial services stocks like: FBNH, Zenith Bank, UBA, Access Bank and Guaranty Trust Bank.
Cadbury and Mutual Benefits Assurance were the best performing stocks for the session, gaining 10% and 8.70% respectively to close at N12.10 and N0.25 per share, purely on market sentiment and forces. On the flipside, Cornerstone Insurance and Sterling Bank led, losing 8.70%% and 8.51% respectively to close at N0.21 and N2.15 each, on profit taking.
Market Outlook
We expect a slowdown in profit taking while volatility may continue in the midst of more 2018 financials expected as market players adopt the wait-and-see attitude in face repositioning for 2019 dividend declaration season and relative peace to shape market performance in the interim. We advise cautious trading and investing while positioning in fundamentally sound equities.
Volatility will also continue as investors and fund managers reposition their portfolios, with eyes fixed on earnings reports, but investors should review their positions in line with their 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,
We advise also that investors should allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals
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3. Sectoral Analysis and Projections that support Stock Prices
4. How Government Policies & Reforms influence market performance
5. How to invest in equities, using Quarterly Earnings for Profitable Returns
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
