Investors Position, Take Profit, Look To Earnings Season, Economic Data For Direction

Market Update for October 12

The stock market on Thursday had a volatile and mixed performance to slightly reverse two trading sessions of a down market that had been on sideways trending range, before closing higher. The NSE benchmark index opened the day lower, and then rallied marginally in the mid-morning till afternoon as the intraday high of 36,732.24 remained the new resistant to breakout for new trend to be ushered in in this recovery market and economy, especially when the Q3 corporate earnings reports that will further boost market fundamentals is around the corner. Add this to the September inflation figure and Q3 GDP numbers which will further reveal the health status of the Nigerian economy that is underway, as government still continues. It is also unfortunate that the promise has at this point in time continue to promise that it would release funds to implement capital projects in 2017 budget, just as it is going ahead with its plan to borrow to finance the year’s Appropriation Act.
With the market in recovery mode and the loss sustained so far this week, market breadth on Thursday was healthy on a very high volume largely driven by foreign investor activities in the shares of Diamond Bank, despite the decline in the banking sector index to close lower at the end of the trading session due to profit taking. The NSE Insurance and NSE Consumer Goods indexes were top performers for the day as prices of stocks in the sectors were up.
The up trending momentum for the day was supported by buying pressure that increased as revealed by the volume index of 2.12, while buying position was 100% and 0% selling volume, to halt the previous day’s bear transition. However, the market remain expectant on a mixed sentiments as investors and traders are still bullish on the bourse with seasonal changes likely to have positive effects on the market especially with positive fundamentals favouring oil price increase, as revealed recently by the research arm of the world’s biggest commodity trader. Also the expected reclassification of Nigeria into the emerging market index in November is expected to be a plus at a time many international fund managers look to emerging markets for higher yield at a time their domestic markets hit at saturated point amidst crashes, corrections and pullbacks.
Thursday’s marginal gain on a very high volume did not create a negative divergence, despite the pockets of profit taking here and there with a potential pullback, which the expected numbers will decide.
Meanwhile, the All-Share index gained a marginal 79.42basis points to close at 36,732.24 from an opening figure of 36,652.82 which represented a 0.22% growth, just as market capitalisation for the day went up by N27.34bn close at N12.64tr, from the previous session’s N12.62tr, also representing a 0.22% value gain in investors’ portfolio.
The upturn recorded in the share price of low, medium and high cap stocks impacted positively on the ASI’s year-to-date return, which stood at 36.68%. This is just as the market capitalisation growth year-to-date stood at N3.40 trillion within the same period, representing a 36.74% rise above the year’s opening value.
Market breadth for the day was positive and strong as the number of advancers widen to outpaced decliners l in the ratio of 30:13 on a high volume traded that was higher than previous day’s level to halt down market.
Market activities for the day, in terms of volume and value, were up by 31.98% and 73.77% respectively to 443.68m shares worth N3.18bn, from previous day’s 336.39m units valued at N1.83bn.
Transactions in the shares of Diamond Bank, UBA, Zenith Bank, Transcorp and Fidelity Bank topped the volume chart.
At the close of trading, AXA Mansard topped the advancers’ table, chalking 6.49% to close at N2.46 per share on market forces and Q3 expectations, followed by Diamond Bank which rose 5.00% to close at N1.05 per share on expectations of its Q3 numbers and market sentiment.
On the flipside, University Press dropped 4.90% to close at N2.33 on market sentiments, followed by Fidson Healthcare that lost 4.57% to close at N3.34 on market forces and profit taking.

TODAY’S OUTLOOK
As the market opens this morning, expect volatility to persist owing to positioning, profit taking and earnings season speculation that kicked off with traders returning to play the season ahead of September inflation and Q3 GDP figure in the amidst of year-end seasonality.
As we move into mid-month of earnings season period more numbers are likely to be released but one thing that is clear in the current market situation is that smart investors are accumulating and enhancing their positions in selected stocks.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year trading activities, especially now that prices of stocks are looking down amidst improving economic and market fundamentals.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Investing in the stock market is in phases. You must know this in order to manage your trading and investment risk. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack today and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable in this recovery market.
The workshop materials on Trading and Investing for Financial Independence series are Available. Kindly call or send yes to 08032055467 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

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