Investors Await Q3 Earnings Reports To Rebalance Portfolios, Ahead Of Year-End

Market Update for Octobr2, 2018

The market had a volatile session on Tuesday, opening the week on a negative note.
Monday was observed as a public holiday to mark Nigeria’s 58th independence anniversary.
The NSE index rolled over marginally at the opening, testing the previous trading session’s resistance level, before pulling back on profit taking and recent macro-economic indices emanating from the Central Bank of Nigeria and the National Bureau of Statistics (NBS).
Also, the Purchasing Managers’ Index (PMI) for the month of September released by the CBN showed a decline to 56.2 points, from 57.1 points in August, indicating slowdown in Nigeria’s manufacturing and real sector activities. This is also interpreted as a further confirmation and pointer to fears expressed by members of the Monetary Policy Committee (MPC)of the CBN as captured by the communiqué issued at the end of their September 23 and 24, 2018 meeting. The committee had warned that unless something urgent was done to rev the economy, Nigeria may slip into recession again. Stimulating the economy is no rocket science. There is need for proper implementation of 2018 budget, just as expected electioneering campaign spending should begin, so as to boost economic activities, especially at the bottom of the pyramid, despite the fear inflation rate spiraling.
In the last quarter, the manufacturing PM1 had trended up and down from 56.8 points in July to 57.1 in August down again to 56.2 in September to hit the lowest since December 2017.

The NSE opened up, in the morning after which it rallied marginally by the mid-morning before correcting from intraday high of 32,815.19 basis points to touch a low of 32,695.45bps and then retracing back to close the day red at 32,711.65 bps on a low traded volume.
Tuesday’s market technicals were negative with high sell sentiments, low volume traded and negative market breadth as revealed by Investdata’s Daily Sentiment Report, showing a ‘sell’ volume of 86% and ‘buy’ position at 14%. Volume index was 0.80of the day’s total transactions.
The momentum behind the day’s market performance was however weak, despite showing relative strength in recent days, as reflected in the money flow index at 56.22bps, which fell slightly down from previous day’s 56.82points, indicating that funds exited some stocks due to profit booking in the midst of the prevailing low market liquidity.

Index and Market Cap
The All Share index at the end of the day lost 54.72bps, closing at 32, 711.65 basis points, after opening at 32,766.37bps, representing a 0.17% decline, just as market capitalization lost N19.98bn, closing at N11.94tr, from N11.96tr, representing a 0.17% value loss.
If you haven’t joined Investdata Buy & Sell Signal setup, where you can look over our shoulder and follow to know when to hold cash and take advantage of the watchlist of stocks for different investment purposes that you may position in, as the market decline create new opportunity. To register and become a member send Yes or stocks to the phone numbers below. The number of stocks on our watch list has increased due to the prolonged correction. Take advantage of this service to buy right and sell right.
The session’s downturn followed losses suffered by stocks like Nestle, Guaranty Trust Bank, Flour Mills, CCNN, Guinness, Dangote Sugar and Uacn Property, bringing the NSE’s Year-to-Date return to 14.46%, while market capitalisation dropped by N1.67tr, representing 12.25% from the opening value.

Mixed Sector Performance
Sectorial performance for the day was largely bearish, except for the NSE Banking and Oil/Gas. Market breadth was negative as decliners outpaced advancers in the ratio of 17:15, reversing Friday’s flat position.
Market activities in volume and value were up by 0.06% and 19.86% respectively to 184.59m shares worth N2.38bn, from the previous day’s 184.53m units valued at N2.82bn.
Transactions were boosted by trading in financial service stocks like: FCMB, Guaranty Trust Bank, Zenith Bank, Fidelity Bank and UBA.
Forte Oil and Fidelity Bank were the best stocks as they topped the advancers’ table, after gaining 6.75%and 5.9% respectively to close at N21.40 and N1.80, purely on market sentiments and forces, ahead of expected Q3 numbers. On the flip side, AG Leventis and First Aluminum lost 10% each, closing at N0.37 apiece on market forces and profit booking.

Market Outlook
We expect the market to remain volatile as profit takers and bargain hunters interplay the market ahead of Q3 earnings reporting season that kicks soon, in the midst of political risk especially with primaries ongoing across the country.
Meanwhile, investors are looking forward to Q3 earnings reports so as to rebalance their portfolios and watch the political space, while analysing the actual numbers that will give insights into expectations for Q3 GDP and full year companies earnings power that are likely to drive prices and determine the market before or after February election.
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,
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst mixed company,economic and market fundamental.

Attention! Attention!! Attention!!!
Investdata Consulting Ltd presents The 8thedition of its TRADERS & INVESTORS SUCCESS SUMMIT tagged: INVEST 2019, designed to be the biggest yearly workshop for stock market traders &investors in Nigeria.
Theme: Adopting The Billionaire’s Mentality InStock Selection.
Venue: Ostra Hotel & Hall, Alausa, Opposite NNPC Gas-Plant Ikeja Lagos.
Date: Saturday, December 8, 2018.
Time: 10a.m.
The huge decline in stocks from its January 2018 peak has not necessarily been due to the fundamentals of quoted companies, but investors flight for safety over uncertainties arising from next year’s general elections, participants will learn from experts/facilitators at the workshop, how and where to position for juiciest returns, depending on investment horizon.
Previous editions have attracted participants from diverse class of investors and traders, as well as several world-class professionals and experts as speakers and facilitators, including representatives of quoted companies and stockbroking firms. The event has helped market players to effectively time opportunities for higher returns in the New Year.
In today’s equity market, there is wisdom in being able to identify ‘buy’ opportunities very early and sell for maximum returns, while minimizing loss in any market situation.Understanding the dynamics of the stock market during any cycle is the very key to successful trading and investing. For this to happen,we must arm ourselves with knowing the essential driving forces behind the market as they move up and down.
At the INVEST 2019 TRADERS & INVESTORS SUCCESS SUMMIT (TISS) you will discover some seldom considered aspects of investing and trading that can help you bag more big winners, while ratcheting down the number of losers in 2019 and beyond.
This summit will provide answers to these six crucial questions AND others

What exactly is it we are trying to do as traders & investors?
• What occurs every post-election year that we wish to take advantage of?
• What are the prevailing market moves and who are the dominant players?
• What is ‘smart money’ doing?
• Where should we look to enter the market?
• Is it the same every day, season and year?

• … andlots more.
When you answer these important (and frequently overlooked) questionscorrectly, your trading/investing skills will launch into new levels.
For Registration kindly send YES or REG to 08028164085, 08032055467, and 08111811223 now for details.

Ambrose Omordion
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08032055467