Money Flow Index, Confidence Nose-dive, As Price Drops Offer Entry Prospects On NGSE

Market Update for March 25
The twin evil of dwindling confidence and low liquidity on the Nigerian Stock Exchange (NSE) have continued to militate against it, judging by yet another fall in its benchmark indicators on Monday, the first trading session of the week. This was despite impressive earnings from Julius Berger and 11 Plc released last week but failed to elicit any kind of market reaction, instead, it suffered a decline, reversing Friday’s up market.
From the political perspective and despite the electoral season ending with the March 23 supplementary elections in six states, the lack of trust in Nigeria’s electoral process may not change so soon. The market has also suffered from the lack of economic news strong enough to change the narratives, but we wait to see whether there could be a pull from the ignited by the outcome of Tuesday’s Monetary Policy Committee (MPC) meeting that could affect the direction of the market. But then, this may not happen, give media reports of the Central Bank of Nigeria (CBN) governor hinting that all monetary instruments could likely remain unchanged.
Trading on Monday was volatile and mixed. The market opened on a downside as the index was hit with selloffs which pulled it to touch intraday low of 30,996.82 basis points, after opening high at 31,139.35bps, before retracing back up late afternoon to finish the day lower than it opened, at 31.042.32bps. This was after it had test the recent support level on a very low traded volume that signaled high cautious trading during the session.
Also, an important pointer to the situation of things on Monday, was the money flow index which touched its lowest point this year at 12.92 points, compared to its year-to-date high of 93.02 points on February 21, 2019, just before the Presidential and National Assembly elections on February 23. Immediately after that election, smart money and institutional funds that pushed the market up a few weeks to the election exited their positions, as the results were being collated and hints of the poll’s outcome started to filter out.
Since then, the composite NSE All-Share index has mostly gravitated towards the south, despite the seemingly high dividend payout witnessed in the ongoing earnings season that has been characterized by mixed numbers.
Market technicals on Monday were negative and mixed as volume traded remained lower than previous day’s in the midst of negative breadth and mixed sentiment, as revealed by Investdata’s Daily Sentiment Report, showing sell position of 68% and buy volume at 32% on total daily transaction volume index at 0.55.
Energy behind the day’s market performance were weak and down as shown by money flow index at 12.92 points, from previous day’s 24.14bps, indicating that funds are exiting the market for safer investment window.

Index and Market Cap
At the close of the Monday’s session, the benchmark index NSEASI shed 97.03bps to close at 31,042.82bps, from an opening figure of 31,139.35bps, representing 0.31% decline; while market capitalization lost N36.19bn, closing at N11.58tr from its opening value of N11.6tr, also representing a 0.31% value loss.
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Monday’s downturn was due to selloffs in medium and high cap stocks like Dangote Cement, Nestle, 11Plc, Cement Company of Northern Nigeria, FBN Holdings, NEM, Oando, Access Bank, Dangote Flour, FCMB, Zenith Bank and Transcorp. This impacted on Year-to-Date loss, dragging it to 1.24%, while market capitalization loss increased to N144.56bn from the year’s opening level of N11.72tr, representing a 1.23% decline in value.

Bearish Sectoral Indices
All the sectoral performance indexes were in red, reflecting the massive profit booking across the sectors, with the NSE Industrial Goods index suffering the most, after shedding 1.68%, just as market breadth turned negative with decliners outnumbering advancers in the ratio of 19:12.
Transaction volume was down by 27.03% to 168.72m shares, compared to the 250.03m units exchanged on Friday, while value rose by 43.37% to N3.76bn, compared to the previous day’s N2.43bn. Volume was driven by financial services stocks like: Guaranty Trust Bank, Zenith Bank, Access Bank, FBNH and UBA.
Redstar Express and University Press were the best performing stocks, topping the advancers table with 10% and 8.11% gains respectively to close at N5.50 and N2.00 per share on market sentiment and forces. On the flipside, Academy Press and Consolidated Hallmark Insurance lost 8.37% and 6.90% respectively, closing at N0.33 and N0.27 each, on market forces and profit taking.

Market Outlook
We expect a down market today, irrespective of the likelihood of more earnings reports pouring in as the March 31, 2019 official deadline for companies with December 31, 2018 year-end earnings reporting season draws to a close on Friday.
We note that the likely retention of the benchmark Monetary Policy Rate of the CBN at 14% at the end of the ongoing MPC meeting will further slowdown the market and the economy, because the high interest rate continues to entice foreign investors and attract foreign portfolio and direct investments. This high rate is however at the detriment of domestic investors and businesses expected to drive economic activities and create jobs. Investors look to MPC meeting outcome and government’s policy direction as the market faces low liquidity problems in the ongoing earnings reporting season, vis-à-vis market and economic fundamentals.
Given the drop in the prices of major blue chips in recent times, creating entry opportunities, we expect speculative trading to shape the market direction going forward.
The volatility witnessed last week, was driven by traders and investors repositioning ahead of dividend declaration by major listed companies.
The ongoing volatility will continued as investors and fund managers rebalance their portfolios, with eyes fixed on political space and ongoing full year company earnings position and post-election market dynamics. 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.

Appreciation
Meanwhile, we greatly appreciate participants in the Abuja Invest 2019 Post-Election Bulls & Bears held on Saturday, March 23.
The investment education train moves to Port Harcourt, Rivers State, with Chart Summit 2019!

Attend the Practical Conference on Technical Analysis Application on stock market for novices and Advance Traders, where we would take participants through:
• Understanding the momentum behind current equity movements and when to exit using SIMPLE Technical Indicators and Tools to avoid losing capital and profit.
•Understanding the dynamics of Technical Analysis and its application in stock, currency and bond markets.
•Our team of experts and time-tested resource persons will show you how you too can successfully and confidently trade and invest in stocks profitably on your own, from your phone, laptop and/or Personal Computer.
•Know what Smart Money is doing
•Know what they are buying or selling, and
•How you can buy what they are buying.

The workshop is scheduled as follows:
FEE: N10,000
DATE:April 13. 2019
TIME: 10am – 4.00pm
VENUE:Emerald Hotel, 193, Aba Road Rumuola, Port Harcourt, Rivers State.

This Summit is designed specifically for those who:
•Jump off profit position out of fear
•Suffer indecision in pulling the trigger for fear of sustaining a loss
•Holding on to losing positionsfor fear of realizing a potential loss
•Trading often leads into unplanned trades for fear leaving money on the table
•Do small trade size or invest small amounts because you’ve just suffered huge loss, or
•Plan to increase your position size to make up for past losses

This practical workshop is for novice traders, investors, professionals and fund managers who want to overcome fear and improve their trading performance. The workshop is basically on practical charting on evidence-based techniques that is working in today market, just as the power of focused trading and investing strategies to help participants build mental skills and turn fear into profits, besides protecting capital.

Registration is ongoing

Prepare yourself to profit from the market, as the economy recovers in the months ahead, while truly achieving financial independence and freedom in 2019 and beyond. There will be Home Study Packs you can play and view on your phone, laptop and television sets that will teach, among others: Stock trading/investing, Fundamental/Technical Analysis on sale at the venue. All at 20% discount for participants.
Also, Come With Your Laptop for the practical sessions.

TAKE ACTION
The difference between you and others who are not aware of what I am sharing with you is ACTION. Take action that will transform your life throughout 2019 and beyond by getting the just concluded and life transforming INVEST 2019 TRADERS & INVESTORS SUCCESS SUMMIT Home study pack (USB) that you can play on your phone, Laptop and Television set. The event, which held on Saturday, December 8, 2018, was yet another successful, insightful and educative outing that not only offered direction as to where investors should look for a profitable trade in 2019, insight into industries, sectors and companies to seek worthwhile returns. What stocks should you buy? Grab the pack for the 10 Golden Stocks with possibility of offering in 2019 multiples of what broader stocks do, coming out of this market correction environment.
Don’t sit on the Fence call or text Stock to 08028164085, 08032055467, 08111811223 now.

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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