Market Update for November 5
Thursday’s trading on the Nigerian Stock Exchange (NSE) succumbed to profit taking on a high volatility and volume traded, as the benchmark All-Share index closed slightly lower, halt the two previous session of bull transition.
Insurance and consumer goods stocks dragged the market down as investors took profit on the industries, just as the wave of buying interest and selloffs continued, while are already seeing money flow into dividend paying stocks in expectation and banking stocks expected to file their Q3 results soon.
Looking at the numbers released so far, it seems that corporate performance has remain resilient in the face of the lingering economic downturn and challenges, making earnings that have come better than expected to give investors insight into how they should position ahead of year-end and the 2021 corporate actions.
In repositioning your portfolio to take advantage of new opportunities in the market, your investment goals and strategies will guide you as per entry and exit strategies to avoid being trapped in any position. Dividend yields above 7.5% should be the target of investors at this time.
Thursday’s trading opened marginally on the downside in the morning before oscillating between mid-morning and midday on buying interests, before profit takers hit the market late afternoon. This pulled the composite index to an intra-day low of 30,722.48 basis points, from its high of 30,772.77bps before closing below its opening figure at 30,738.92bps.
Market technicals for the session were negative and mixed, as volume traded was higher than the previous session in the midst of flat breadth and selling sentiment, as revealed by Investdata’s Sentiment Report showing 33% ‘buy’ volume and 67% sell position.
Total transaction volume index stood at 1.03 points, just as impetus behind the day’s performance remained strong, with Money Flow Index sliding to 94.08 points, from the previous day’s 87.63 points, an indication that funds enter some stocks despite the down market.
Index and Market Caps
The key performance index, at the end of Thursday’s trading shed a marginally 6.88bps, closing at 30,738.92bps, representing 0.02% drop after opening at the 30,741.88bps, just as market capitalization fell by N8.32bn to N16.06 trillion also representing a 0.04% value loss, indicating the likelihood that a company has been delisted
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The downturn was driven by profit booking in stocks like BUA Cement, Flour Mills, Ecobank Transnational Incorporated, International Breweries, Fidson, ABC Transport, Honeywell, Wema Bank and Linkage Assurance, among others. This raised Year-To-Date gain to 14.52%, while Market capitalization YTD gain climbed to N3.20 trillion, or 23.99% above the year’s opening value.
Mixed Sector Indices
Performance indexes across the sectors were largely bearish, except for the NSE Banking and Oil/Gas that closed higher by 0.06% and 0.04% respectively, while NSE Insurance led the decliners after losing 0.65%, followed by Consumer goods 0.53%, while Industrial goods closed flat.
Market breadth was flat as advancers were equal to decliners in the ratio of 16:16, while activity in volume and value terms were up by 50.16% and 113.86% respectively, as players traded 430.12m shares worth N6.62bn from the previous day’s 286.45m units valued at N3.09bn. Volume was driven by trades in FBNH, BUA Cement, Access Bank, Transcorp and Zenith Bank.
Transcorp and Learn Africa were the best performing stocks for the session after, gaining 9.86% and 9.52% respectively, closing at N0.78 and N1.15 respectively, on market forces. On the flip side, Linkage Assurance and ABC Transport lost 8.89% and 8.82% respectively, closing at N0.41 and N0.31 respectively on market forces and profit taking.
Market Outlook
Being the last trading day of the week, we expect this mixed trend to continue, as investors look to more banking results and analyze the numbers released so far to reposition their portfolios on the strength of sector and company’s performance. There was a reversal in direction at the end of trading as NSE index action and indicators consolidated, turning up to look the same direction on above average traded volume and positive buying sentiment.
Again, the current undervalue state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation for the rest of the year.
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CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08032055467
