Investors, Traders Ignore Positive Economic Data, Position For Influx Of December Year-End Financials

Market Update for February 27

Nigeria’s stock market on Tuesday continued its volatility, only that this time the five-day seeming bull transition was halted, after highly capitalized stocks closed south, caving in under pressure from profit takers, despite the rebound in oil and gas stocks due to expected high payout from the sector.
It is not known whether the slide had anything to do with investors and traders being unimpressed with the stronger-than-expected Q4 and 2017 full year GDP data released by the National Bureau of Statistics (NBS), showing that Nigeria’s economic recovery remained on course as the 2017 full-year GDP came at 0.83%, compared to the 1.58% year-on-year contraction recorded in 2016. Nonetheless, the data is a signal that the nation’s economic recovery is seriously on track, largely driven by improvements in all major sectors.
It is also important to note such other factors and drivers of the economic recovery as the rising oil price in the international market, Nigeria’s sustained production output arising from the peace in the oil rich Niger-Delta. This is not forgetting the continued intervention in the inter-bank segment of the foreign exchange market by the Central Bank of Nigeria (CBN) that has ensured stability in exchange rate, which has been of tremendous support to, and impacted positively on the real sector. It however expected that these, as well as the Federal Government’s whole-hearted investment in such infrastructure as roads, rail and power, among others, across the country will support its projected 3.5% GDP growth and economic expansion anticipated this year.
Also, there is improvement in the labour market as the rate of layoff reduced to support growth in household incomes and consumer spending, solid economic recovery, manufacturing and agricultural sector expansion, which should translate to further exports, an upbeat business sentiment and strong sales growth. Moreover, the fiscal authorities must churn out more economic policies capable of supporting its Executive Order on the Ease of Doing Business, as well as disbursement of funds to key sectors to support this economic momentum and achieve the expected growth envisaged this year and beyond.
Investdata expects that inflation will continue to go south and possibly attain single digit figure sometime this year, even as expected reduction in the benchmark Monetary Policy Rate could increase productivity and impact positively on businesses to support real growth.
All of these would server as stimulus to propel an expected and robust upward push for a bulish equity market going forward.
Market technicals on Tuesday were negative and weak, with selling pressure of 81% on low volume traded, while buying position was 19%. Volume index was 0.51 with money flow index at 33.77 point.
Consequently, the market closed with its All-Share index losing 279.92 points at 42,299.56 after opening at 42,579.48 basis points, representing a decline of 0.66% on low traded volume that was higher than previous day’s. Similarly, market capitalisation for the day lost N100.45bn to close at N15.18tr from an opening value of N15.3tr, which also represented 0.66% depreciation in investors’ position.
The downturn was attributed to losses recorded mainly by UBN, Julius Berger, Zenith Bank, Guaranty Trust Bank, International Breweries, UACN, Dangote Cement, Dangote Flour,Seplat, Presco, Lafarge Africa and ETI, which impacted negatively on the NSE’s Year-To-Date returns, as it dropped to 10.61%. Similarly, market capitalisation gain for the period came to N1.57tr, representing 11.54% YTD growth.
The composite index and other sectorial indexes closed in red, except for the NSE Oil/Gas and NSE Insurance that ended the day slightly green, notching 0.86% and 0.29% respectively, while the NSE AseM remained flat.
Market breadth remained negative as decliners outweighed advancers in the ratio of 37:18; just as market activities in volume and value terms were up by 14% and 40.12% to 438.65m shares worth N8.8bn, from previous day’s 384.86m units, valued at N5.47billion.
Transaction volume for the day was boosted by financial services, Industrial and conglomerate stocks like Transcorp, Diamond Bank, FBNH, Fidelity Bank and Access Bank, which witnessed increased trading to top the activity chart.
CCNN and Conoil were the best performing stocks for the day, after they topped the advancers table, closing at N18.20 and N35.25 respectively on market forces and earnings expectation, while Julius Berger and International Brewery emerged the day’s biggest laggards at N24.85 and N57.00 respectively on profit taking.

Market Outlook

Being the last trading day of the month in a week that also ushers in the month of March, which is peak period of the earnings reporting season, expect volatility and strong recovery moves to continue, driven by end of the month trading accounts balancing and more numbers that will hit the market.
Also, expect volatility and repositioning to continue, while profit taking will reduce on the strength of expected payout and earnings surprises.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season when dividend payment is ongoing.
We advise investors to allow numbers guide their decisions while repositioning for the year trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the INVEST 2018 traders and the investors’ summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Meanwhile, a big THANK YOU to facilitators and participants that made the Chart Summit over the weekend a huge success. The eyes of participants were opened to the three tents of technical analysis and how it can enhance traders income, as well as simple trading indicators and tools for successful traders were revealed. Charting of the NSE Index on short and long term direction movements were carried out to guide investors and traders using technical indicators to know the energy behind funds entering the market, or individual stocks and when such funds begin to exit.

Here are some of the great feedbacks from the just concluded Chart Summit:
I have not seen a more lucid, concise, organized & insightful trading and investing educational presentations than the chart summit. All the speakers opened my eyes to how to manage risk using TA, despite the fact that I have been playing the market for 21 years. Mr Ambrose thank you. Please keep this good work you are doing for Nigerians.
Ikechukuw Olisa, an investor

Ambrose and Tunde’s presentations were the simplest, clearest and best understood of the many that I have heard in my trading lifetime of nearly 25 years, please keep it up. Thanks for your time
Oyebola Ademola

The Invest 2018 home study pack content was what attracted me to attend this chart summit today, it was so good that I just couldn’t stop watching. Today’s chart summit was the best class I have attended in over 10 years. It’s going to make a big difference in my trading.
Patrick Udo
Thanks Mike for opening my eyes to risk management and portfolio selection using Technical Analysis tools. Thanks to investdata for putting chart summit together for novice and advance traders. It was well presented and right to the point. Again thanks so much for the beautiful presentation. It’s superb.
Musa Ahmed
Chart Summit on technical analysis for novice and advance traders home study pack will be available on Friday, March 2, 2018, for those who have booked for the USB, you can play it on your phone, TV and laptop. Those interested in the pack should send ‘Yes’ or call any of: 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO | Investdata Consulting Ltd
Tel: 08028164085, 0803205546