Investors Cut Short Five-Day Bull Run With Profit Taking On NSE

Market Update for March 21
Trading activities on the floor of the Nigerian stock exchange closed lower on Tuesday, halting a five-day bull transition as traders took profit from the rally, especially by financial service stocks to join the global markets that were mixed to closed lower reflecting the uncertainty facing the world’s economy.
At the end of the two-day meeting of the CBN’s Monetary Policy Committee (MPC) all the rates were left unchanged due to headwind and uncertainties in the global and domestic environments.
According to a communiqué issued at the end of the meeting, members of the MPC called on the fiscal authorities to speed up implementation of the Federal Government’s recently released Economic Recovery Growth Plan (ERGP) with action plans and policies to boost activities in the main sectors that will drive the recovery and create employment, while increasing output and oil the ecosystem to boost confidence.
As the impact of the forex policy implementation and intervention keeps the naira appreciating thereby reducing the gap between the official and black market rates and in the process, the impact of imported inflation. This is already reflecting on the nation’s inflation figures which witnessed a decline for the first time in 15 months and is expected to further drop at the end of this month.
While the MPC retained the benchmark rates to consolidate the little gains recorded in the economy, Cadbury Nigeria Plc presented a disappointing earnings report, as is expected from most players in the nation’s manufacturing sector, particularly those that have to import raw materials and machineries. Such disappointing numbers are expected to further depress the market.
The composite NSE All-Share Index shed 122.98 points to close at 25,558.57 points, from an opening figure of 25,671.55 points, representing a 0.44% decline on a low volume, compared to the previous day’s performance. Market capitalisation closed in the same direction, losing N39.09 billion to close at N8.84 trillion, from an opening N8.88 trillion. This further increased the All-Share index’s year-to-date negative position to 4.92%, while market capitalisation for the period adjusted to N402.04billion, representing 3.82% loss YTD, from the opening value.
Market breadth for the day was negative and weak as the number of decliner’s outpaced advancers in the ratio of 24:13 to reverse it bull run.
Transaction in volume and value were down by 68.96% and 40.71% respectively to 153million of shares from 495.24 million in the previous day and N1.50 billion, from N2.53 billion.
Financial services boosted stocks like Access Bank, UBA, Zenith, FBN Holding, GTBank and Flour Mills dominated the day’s activity chart as most traded equities by volume.
The NSE All-Share index and all sectoral indices were in the red, except for the NSE Pension and NSE Premium that were down to end the day’s trading.
The day’s trading produced Julius Berger as top advancers, notching 5.26%, followed by Livestock Feeds with 5.00% on market forces, while Cadbury led the decliners log, shedding 5.00%, and Guinness Nigeria, 4.72% to close at N61 per share.
The current trending ability of the market on a daily time frame is strong, as ADX is above 20 at 25.03, MACD still bullish since the last eight trading sessions, while RSI is reading 57.61 as at the close of trading.
Again, hold your position in value stocks likely to pay dividend and those that have recommended dividend already, but whose prices are falling due to market forces.
Watch out for support levels to reposition as recently adjusted share prices for dividend are rebounding.

STOCKS TO WATCH. Aiico, Fidelity, FCMB, UBA, PRESCO, OKOMU OIL, MOBIL, AIRLINES SERVICES.

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