Market Update for January 14
It was yet another positive session on the Nigerian Stock Exchange Monday, as the composite All-Share index closed higher on a increased buying pressure despite the low traded volume, reflecting difficulties experienced by players due to the technical hitch that occurred during the trading. The trading platform was shut down for about four hours after which market reopened even as the session was only extended by an hour.
The market sustained the third consecutive gain for the year as highly capitalized stocks like Dangote Cement recorded marginal gains. Notwithstanding the technical glitch experienced on Monday, the low volume traded signals an imminent end to the recent rebound and slowdown of panic selling. This is however subject to confirmation at Tuesday’s session.
We cannot however shy away from such factors as rebound in oil price, the relatively positive economic indices, the outcome of next month’s Presidential election and the 2018 full-year earnings reporting season, among others, would expectedly be catalysts that would drive the market either way.
The NSE’s benchmark index opened on gap down in the morning before the technical problem and by afternoon after market reopened, touching intra-day high of 29,995.72 basis points, from a low of 29,689.73bps. It then pulled back in the last few minutes to close the session at 29,964.79bps on a flat market breadth.
Monday’s market technicals were positive, but mixed as traded volume was lower than previous day’s in the midst of a neutral breadth and strong sentiment as revealed by Investdata’s Daily Sentiment Report, showing buy volume of 90%. Volume index for day’ was 0.40.
Momentum behind the day’s market performance was weak, despite inching up, as reflected in the 27.76bps money flow index, from previous day’s 25.88bps, an indication that funds entered the market and some stocks, hence the improved buy interest and regardless of the prevailing low liquidity on the exchange.
Index and Market Cap
NSE All-Share Index gained 134.09bps, closing at 29,964.79bps, from 29,830.70bps, representing 0.45% growth. Market capitalization rose by N50bn, closing at N11.17tr, from the opening value of N11.12tr, representing a 0.45% appreciation in value.
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Monday’s upturn resulted from value gain by industrial goods stocks like Dangote Cement and Lafarge Africa, as well as financial services stocks- Diamond Bank and FCMB, thereby reducing Year-to-Date loss to 4.66%. Market capitalization losses also dropped to N525.4 billion, from its opening level of N11.72tr representing a 4.66% decline.
Bearish Sectors Indices
All sectoral indices closed largely bearish, except for the NSE Industrial Goods that was in the green. Insurance and Oil/Gas indexes closed 1.53% and 0.27% flat respectively; just as market breadth was at par, as advancers equaled decliners in the ratio of 11:11. Market transaction in volume and value terms slowed down by 35.82% and 60.49% to 132.41m shares worth N1.09bn from the previous day’s 206.3m units valued at N2.75bn. Transaction volume was driven by financial services and conglomerates stocks: Diamond Bank, Access Bank, Zenith Bank, Transcorp and UBA.
The best performing stocks for the session were First Aluminum and United Capital, topping the advancers table, after gaining 9.09% and 5.30% respectively to close at N0.36and N2.98 each on market forces and expectation of Q4 earnings. On the flipside, Linkage Assurance and Wapic Insurance led the decliners’ table, losing 9.23% and 9.09% respectively to close at N0.59 and N0.40 each, on profit taking and market forces.
We expect the ongoing trend and volatility to continue amidst repositioning for 2018 full year earnings season to shape market performance ahead of the various factors listed above. We advise cautious trading and investing in the days ahead.
The ongoing volatility will persist as Q3 numbers assist investors and fund managers reposition their portfolios, while watching the political space and ahead of full year company earnings position and post-election market dynamics. These are likely to drive prices north, or south, while determining market direction before or after the Presidential Election.
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.
PORT HARCOURT 2019
Investdata will be in Port Harcourt, Rivers State where we would reveal investment opportunities available for smart investors on the Nigerian Stock Exchange this year.
Venue: Emerald Hotel, 193, Aba Road Rumuola, Port Harcourt, Rivers State,
Date: Saturday 26, January 2019,
Registration Begins at 9.am prompt
Admission is free
Comprehensive Home study packs of INVEST 2019 TRADERS & INVESTORS SUMMIT held on December 8, 2018, containing the 10 golden stocks for 2019 will however be on sale for N20,000 each.
The FIRST 20 persons to register at the venue will get 20% discount.
This seminar will cover the following:
Review of 2018 market performance
Outlook for 2019 and Post elections expectations
Dividend & Bonus expectation in 2019
Sector by Sector Analysis and projections
Don’t sit on the Fence call or text Stock to 08028164085, 08032055467, and 08111811223 now.
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08032055467