Investors In Last Minute Market Evaluation Ahead Of Saturday’s Polls

Market Update for February 21
Thursday’s trading on the Nigerian Stock Exchange (NSE) was highly volatile, closing lower and in the process, halting the two-day bull transition on profit booking in financial services and consumer goods stocks.
Selling pressure in the last trading minutes of the session affected the share prices of Zenith Bank which had days ago announced an impressive dividend of N2.50 kobo per share, while United Capital made available its offer of 30 kobo dividend in the course of trading. This was not obviously pleasing to the market, in view of its flat numbers and cut in dividend proposed from the previous year’s 35 kobo.
Also, it was obvious that investors are being cautious ahead of Saturday’s rescheduled presidential and National Assembly elections that are expected to usher certainty into the market at least for another four years. Investors are known to have, and continue to price the possibility of emergence of either of the two leading candidates- incumbent President Muhammadu Buhari of the All Progressives Congress and the Peoples Democratic Party’s Atiku Abubakar into the market. It is however expected that the release of the election’s results next week will further see market induced adjustment of prices, depending on the outcome.
Thursday’s session started out with a gap to the upside on the NSE, as the market continued oscillating between mid-morning and late afternoon when it rolled over hard to touched intraday lows of 32,568.66 basis points, from a high of 32,734.34bps on a low traded volume and negative sentiments. The NSE All-Share index dropped sharply and then rallied back, only to fail at overhead resistance near the declining tops’ line and lateral resistance. A late pullback brought the index off the highs to finish the session lower.
Market technicals were weak and mixed with low volume traded that was lower than previous session’s in the midst of a positive breadth and high selling sentiment, as revealed by Investdata’s Daily Sentiment Report, showing a sell volume of 100% on a daily transaction volume index for the day at 0.61.
Momentum behind the day’s market performance was high, despite the down market as shown by money flow index at 93.02points, up from previous day’s 88.76bps, indicating that funds are still entering some stocks.

Index and Market Cap
The benchmark NSEASI at the end of the session shed 45.40bps, closing at 32,568.66bps, having opened at 32,614.06bps, representing a 0.14% decline, while market capitalization was down by N16.93bn to close at N12.15tr, from the opening value of N12.16tr. This represented a 0.14% value loss.
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The day’s downturn resulted from profit taking in medium and high cap stocks like: Zenith Bank, UBA, International Brewery, Flourmills, UACN, Dangote Flour and United Capital, among others. This impacted negatively on Year-to-Date gains which contracted to 3.62%, while that of market capitalization dropped to N329.93bn, from the year’s opening level of N11.72tr, representing a 3.62% growth.

Mixed Sectoral Indices
All sectoral indices were largely bearish, except for the NSE Industrial goods and Oil/Gas thatclosed higher. The NSE Insurance led the decliners with 0.98% on a sell-off in the name of profit taking, despite market breadth remaining positive as advancers outnumbered decliners in the ratio of 21:15.
Market activities were down in volume and value by 50.29% and 60.28% respectively to 218.16m shares worth N2.24bn from previous day’s 443.78m units valued at N5.64bn, while volume was driven by financial, consumer and conglomerate stocks like: Transcorp, FCMB, Guaranty Trust Bank, Zenith Bank, Access Bank.
Ikeja Hotel and ABC Transport were the best performing stocks for the day, chalking 9.94% and 8.33% respectively to close at N1.99 and N0.52 per share on market forces. The flipside was led by Linkage Assurance and International Breweries, after shedding 10%% and 9.48% respectively to close at N0.63 and N26.25 kobo each, on market forces.

Market Outlook
Besides the sell-off, market pullback was due to cautious trading which led to low volume traded, despite profit taking and volatility that continued. Investors and traders also continued their repositioning for the 2019 dividend declaration season and post-election rally expected to shape market performance in the interim. We advise cautious trading and investingwhile positioning in fundamentally sound equities.
Volatility will also continue as investors and fund managers reposition their portfolios, with eyes fixed on political space, 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 investors to 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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Ambrose Omordion
CRO|Investdata Consulting Ltd

info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
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Tel: 08028164085, 08032055467

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