Market Update for March 15
(By Ambrose Omordion) Trading on the floor of the Nigerian stock Exchange closed marginally higher to sustain its two day bull transition as more impressive earnings reports hit the market. The market is searching for direction at a time when mixed sentiments remain the order of the day and strong numbers from companies reporting higher dividend payout is not influencing their share prices or the general market performance. This is therefore providing an insight into what will happen when companies with weak earnings start coming to the market with their numbers and offering at best leaner dividend than they did in the 2015 financial year or nothing at all, a situation expected to further depress the market going forward until general market liquidity improves.
After the trading hours, Total Nigeria released an impressive earnings report for 2016 financial year with a final dividend of N7 in addition to interim dividend of N10, bringing to total of N17 payout for 2016, thereby becoming the first result from the sub-sector to hit the market.
In any market situation, individual stocks or sector outperforme the general market. The expected rebound in the market may be prolonged for many reasons including low liquidity, confidence, implementation style of the government and its policy direction, among others.
On Wednesday, interest rate was hike with 0.25 percentage point by the U.S Federal Reserves, following which stock markets across the world closed with mixed sentiments as the dollar depreciated, and crude oil prices are making a comeback on the track to end its six day slide.
Meanwhile, the composite NSE All-Share Index inched up by 16.67 points to close at 25,301.23points from an opening figure of 25,284.56 points, representing 0.07% growth on improved trading volume. This was attributed to traders repositioning in already adjusted stocks using their support level as advise to trade at this point. Similarly, market capitalisation for the day was up by N5.77billion to close higher at N8.76 trillion, from an opening value of N8.75 trillion, representing 0.07% value appreciation.
Low cap stocks price appreciation marginally reduced the All-Share index’s year-to-date negative position to 5.83%, just as capitalisation for the period adjusted to N490.64 billion, representing 5.27% loss from the opening value.
Market breadth was positive but weak as the number of advancer’s outpaced decliners in the ratio of 19:17 to continue the previous day’s bull market.
Transaction volume and value were up by 2.64% and 133% respectively to 233.78 million of shares from 277.76 million in the previous day and N2.16 billion from N923.50 million.
Transactions in financial services stocks like Diamond Bank, FBNH, Fidelity Bank, Ucap and UBA dominated the activity chart as most traded equities by volume.
The NSE All-Share index and all sectoral indices were mixed to end the day’s trading.
During the session, Sterling Bank, Cement Company of Northern Nigeria (CCNN) and Oando informed the exchange of their directors’ meeting to discuss the 2016 financial report and possible dividend payout. Also, IEI informed the exchange of a possible delay in it 2016 account.
Africa Prudential, led the advancers table, chalking 8.12% to close at 2.53; followed by Continental Reinsurance with 8.11% to close at N1.20 possibly on the strength of the early submission of its result and the offer of 14 kobo dividend therein; while Nahco led the decliners table, with 4.76% to close N2.00, next was National Salt with 4.48% to close at N6.56
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 the prevailing mood of the market.
Watch out for support levels to reposition as recently adjusted share prices for dividend are rebounding.