Market Update for Feb 27
The Nigerian stock market opened the week Monday on a positive note, closing higher as the market received the banking sector’s first audited financial, with Zenith Bank presenting to investors and traders its 2016 outing with numbers that elicited mixed reaction that resulted in some profit taking. It was also generally noted that the Zenith Bank result was not solely responsible for the profit taking, as there was the effect of the month-end trading account balance.
Moreso, the weak market fundamentals also weighed down the stock price performance while the benchmark index managed to gain on the strength of value appreciation recorded by high cap stocks like Nigerian Breweries, Guaranty Trust Bank, Zenith Bank, Unilever, Presco and Seplat.
Also, after Monday’s trading hours, more board meeting notifications were released to the investing public as the earnings season enters its peak in the month of March.
Meanwhile, the composite NSE All-Share Index gained 123.05 points to close the day at 25,25 points, after opening from 25,250.37points, representing a 0.49% growth on above average trading volume that indicates market players rebalancing of positions for the last month of the quarter ahead of the peak of the earnings season. This trend is likely to continue depending on the numbers emanating from particular sectors the market looks up to for succor by way of impressive numbers and good reward for investors. These sectors include the financial services, services, petroleum and agribusiness.
The buying volume of total transactions for the day was 94%, while selling position was 6% to reverse the previous day’s down market.
In the same vein, market capitalisation for the day gained N42.58 billion to closed higher at N8.78 trillion, from an opening value of N8.74 trillion, representing 0.49% growth in value, with the market having positive sentiments in expectations of more results.
The NSE All-Share index’s year-to-date negative position reduced to 5.59%, just as market capitalisation for the same period adjusted down to N465.66bn, representing 5.04% loss over the same period.
Market breadth was at equilibrium as the number of decliners was equal to advancers in the ratio of 17:17 to continue bull transition.
The day’s traded volume and value were mixed as volume was down marginally by 1.76% to 254.75m shares from 259.31m in the previous day, while value was slightly up to N2.54bn against the previous valued at N2.42bn.
Transactions in financial services stocks like Zenith Bank, Unic, Cornerstone, UBA and Ucap dominated the activity chart as most traded equities by volume.
The NSE All-Share index and all sectoral indices had mix performances to close the day’s transaction.
At the end of the day, Zenith Bank released it full year earnings report with final dividend of N1.77, for which closure and payment date have been slated for March 13 and 23, 2017 respectively.
Also, Nigeria Emalaware and Grief Nigeria released their Q3 and Q1 results respectively.
Honeywell Flour topped the advancers log with 5.00% to close at N1.05; followed by Seplat with 4.86% to close at N380 per share. On the decliners table, 7up led with 6.10% to close at N100; ahead of NPF Microfinance that shed 5.00% to close at N1.12 per share.
DAILY TIME FRAME NSEASI
The NSEASI on a daily time frame remained strong on its recovery trend. It is however still within descending triangle chart pattern and falling channel trying to retrace up after forming double bottom level at 25,125 some days ago, as the index has refused to breakdown the 25,000 psychological lines, despite the mixed sentiment so far. The relatively improving volume of trade at this point shows that market players and investors are repositioning their portfolios at a time more scorecards are expected in the market. The market continuing in this direction will be a function of the strength of the numbers when they are finally released to the investing community. But the market is gradually coming out of its oversold region and funds are entering the market as revealed by money flow index.
The trending ability of the market on a daily time frame is strong, as ADX is above 20 at 25.28, MACD is bullish since the last two trading sessions while RSI reading 42.30 as at the close trading yesterday.
As you watch the market, hold your position in value stocks that are likely to pay dividend.
STOCKS TO BUY
Zenith Bank is still good at this price, Eterna, UBA, Aiico, Presco, Total and Ucap for income investors.
