Market Update for Feb 8
The nation’s equity market, on Wednesday closed flat to halt the three straight trading sessions of bear run on the floor of the Nigerian Stock Exchange as investors and traders redirected their investment to the services and financial services sectors. The relatively low price and risk in some insurance stocks with records of dividend payment and strong earnings power are gradually become investor’ toast as volume of trades in recent days have been looking up, indicating accumulation.
Prices of crude oil at the international market recently rallied to $57 before pulling back as all parties to the agreement try to adjust to reality of having a sustained price and subsequently move forward, following which the commodity price is at a point of reflections. There is need for government urgently work towards restoring peace to the troubled Niger delta region so as to grow our output to drive reserve and the economy.
Approval of the $1 billion Eurobond by the National Assembly Wednesday is a welcome development, so the government as the highest spender in the economy can push Nigeria out of recession with good and right policies.
Meanwhile, the composite NSE All-Share Index gained a marginal 29.84 points to close at 25,476.45 points after opening at 25,446.66 points, representing a growth of 0.05% on a high volume of trades. This was driven by insurance stocks to reverse loses recorded in the three trading sessions of bear transition as the mixed sentiments continued with buying position of 41% and selling volume of 59% as at the close of trading. Also, market capitalisation for the day gained N4.75 billion to close at N8.77 trillion.
The NSE All-Share index year-to-date negative position was slightly reduced to 5.26% on the strength of few high cap stocks that appreciated in value. Market capitalisation for the same period adjusted its loss position to N472.37 billion.
Market breadth was up, but still weak as the number of decliners outpaced advancers in the ratio of 13:11 on a flat market.
Traded volume was up by 67.88% to 347.82 million shares from 207.18 million units, while transaction value declined by 10.76% to N1.41 billion from the previous trading session’s worth N1.58 billion.
Transactions in financial services stocks like: Aiico, Diamond Bank, Staco, Zenith Bank and Africa Alliance Insurance dominated the activity chart as most traded equities by volume.
The NSE All-Share Index and all sectoral indices had a mixed performance, with NSE Premium and NSE Insurance looking up whereas NSE AseM closed flat.
At the end of the day, Neimeth topped the advancers table with 4.92% to close at N0.64, followed by Airline Services, 4.60% to finish at N2.50 each. On the decliners table, Larfarge Africa was atop by 5.90% to close at N41.78, next was AG Leventis by 4.88% to close at N0.78.
DAILY TIME FRAME NSEASI
The index on daily time frame has formed symmetric triangle chart pattern and has broken down the triangle moving to strong support level of 25,203.63 as mentioned in our January review. The momentum and trending ability of the market on a daily time frame is strong, as ADX is below 20. The odds of the market remaining in this direction for the rest of the week are high, just as momentum is high and the recent breakout confirms a weaker market. But due to indifference by many investors, a double bottom may likely form at this point but let us watch how market forces play out today. The index is trading below its shortest moving average. Also, at its oversold region with MFI looking up to indicate that funds are still entering the market. Traders should watch out.
Analyst Opinion: Investors should take advantage of the pullbacks to buy into Aiico, Ucap, Zenith, UBA, Total, and Fidelity.
Also, study the excel sheet of “Investing with numbers for dividend and Capital gain,” for a guide as the earnings season draw closer.
