Market Update for July 26, 2018

Thursday’s trading on the Nigerian Stock Exchange (NSE) was mixed and closed positive, halting two days of losses and slowdown that has continued over the past eight months on value gains recorded by highly capitalized stocks, as bargain hunters took advantage of the low equity prices, particularly of interim dividend paying companies mostly in the banking sector.
Despite the mixed earnings performance and low liquidity, the traders and investors went after companies whose half-year numbers with some surprise which rallied as a result during the session due to their low prices. There was also the future prospect of such stocks sustaining the trend on the strength of their business models, industry and favorable government policy.
The NSE’s benchmark All-Share Index started the day with a big gap up in the morning hours into midday after a 5-wave advance ensued to the right from the opening, but reversed at noon.
However, although the indicators closed positive for the day, the market lacked energy and enthusiasm, to say the least, after touching intraday highs of 36,678.29 from lows of 36,316.30 on a low traded volume to close the trading session at 36,427.22 basis points.
With the earnings season coming to a close on Tuesday, we expect more numbers to poor in today, while the final ones would come on Monday and Tuesday, just as various political parties in the country intensify the process of choosing their flag bearers for different offices. The outcome of these primaries and earnings position of the listed companies will determine the direction of equity prices as liquidity level is expected to improve within this period until the general elections.
Market technicals for the day were positive and mixed as volume traded was low in the midst of flat market breadth and mixed sentiments as revealed by Investdata’s Daily Sentiment Report, showing a ‘sell’ pressure of 69% and ‘buy’ volume at 31%. Volume index was 0.57 of the day’s total transactions.
The impetus behind the day’s market performance was weak, as reflected with the money flow index at 15.63 points, a slide drop from previous day’s 15.75points, indicating that funds are still exiting the market despite closing up, at the peak of earnings season.

Index and Market Cap
It was nevertheless a volatile session for the All Share index had volatile as it marginally gained 80.42 basis points, to close at 36,427.22 basis points, after opening at 36,346.80bps, representing a 0.22% growth. Also market capitalization, was up by N29.13bn to close at N13.2tr from an opening value of N13.17 trillion, also representing 0.22% value gained for the day.
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 oscillate. To register and become a member send Yes or stocks to the phones 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.
Thursday’s upturn was attributed to price appreciation of medium and high cap stocks like Nestle, Guaranty Trust Bank, CCNN, Zenith Bank, UBA, Oando, FBNH, Nascon, Honeywell flour, Transcorp and United Capital. This impacted positively on the NSE’s Year-to-Date return, to reduce its negative position to 4.75%, just as market capitalization within the period lost N397.34bn, same as 2.89% below the year’s opening value.

Bullish Sector Performance
Sectorial performance on Thursday was bullish as all indexes closed higher, with the NSE Banking and Insurance topping the table with 0.77% each. Market breadth was flat as the number of decliners equaled advancers in the ratio of 20:20, to short live the two-day bear market.
Market activities were down in volume and value by 48.10% and 18.34% respectively to 171.22 million shares worth N2.98 billion, from the previous day’s 329.9munits valued at N3.65bn.
Transactions for the day were boosted by trading in financial services and consumer goods stocks, Zenith Bank, UBA, FCMB, Fidelity Bank and Nigerian Breweries that witnessed increased trading to top the activity chart. Incidentally, all of the stocks are interim dividend paying, with the exception of Fidelity Bank.
Honeywell and Cutix were the best performing stocks for the day, topping the advancers’ table, after gaining 9.88% and 9.77% respectively, to close at N1.89 and N4.38 each due to low price, the one-for-one scrip and 20 kobo dividend reward.
On the flip side, Neimeth and Wapic Insurance were the worst, losing 9.50% and 9.09% respectively to close at N0.39 and N0.40 on market forces.

Market Outlook
With more Q2 earnings reports expected in the market today, it is the state of these numbers that will determine direction as more disappointing reports will drive the market further down or reversal if numbers beat expectation, considering the undervalued nature of equities and the high yields. Investors should review their positions in line with investment goals 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, especially during this season were Q2 interim dividend payment are expected in the market arena very soon.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamental.

Please Don’t Miss Out!
All is Set for tomorrow as stock market analysts and traders take a look at the Nigerian equity market, giving insights into stocks that may Soar and those that investors should trade with caution for the rest of this year.
It is at the 2018 mid-year edition the comprehensive stock trading and investing seminar organised by Investdata Consulting Ltd.

Date: Saturday, July 28, 2018.

Venue: Ostra Hall & Hotels, opposite the NNPC Gas Plant, Alausa, Ikeja, Lagos.

Theme: Comprehensive Stock Trading & Investing Toolkit for Rest of 2018.

At this seminar, we have carefully selected a team of analystsand tested equity traders: Baba Ibrahim, CEO, Mainstreet Securities Ltd; Abdul-Rasheed Oshoma Momoh, Head, Capital Market/Trading, TRW Stockbrokers Ltd; Tunde Jeaniogbe CEO, Tradeline Dotbiz and Ambrose Omordion CRO Investdata Consulting Ltd, to review the dynamics of Nigeria’s economy, stock market performance so far and the factors influencing the behavioral patterns we are seeing today.
Participants will also learn strategies that will help minimize losses, protect capital and trade profitably, considering the low valuation that is system-induced and will fade away with time.
The event will also review the operating environment, which is far more important for any market at the moment, than what big fund managers think about valuation, while stressing on the need for value investing and trading, two factors that make the difference.
With value investing gaining popularity by the day, investors and traders who want to succeed in any market situation need trading and investing toolkits to guide against “value booby traps,” looking at the prevailing low equity prices.
Our facilitators will share some insights and interesting takeaways from workshop, including how to trade profitably by combining fundamental and technical analyses, thereby escaping value traps, minimizing losses, while maximizing profit.
The seminar will also review implication of the new pension funding structure, just as participants will learn how to boost their online trading experience.
Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467