NGSE Indicators Up As Investors Stay On Dividend Stocks, Expected Earnings Reports

Market Update for March 4
Nigeria’s stock market had a mixed session on Monday, closing higher and consolidating previous day’s gain on a low traded volume after some back and forth actions, with renewed buying interest in the banking, consumer and industrial goods sectors. This was in the hope of more corporate earnings reports hitting the market as seeming calm returns to the economy and market after the outcome of the Presidential and National Assembly elections held on February 23, 2019.
Trading opened for the week on the upside, but slowed down between mid-morning to midday as traders and investors traded cautiously as funds flowed into the fixed income segment, irrespective of the attractive and high dividend yields prevailing in the equity market. The composite NSE All-Share index rebounded sharply thereafter, and into mid-afternoon when medium and capitalized stocks rallied to break through the overhead resistance level of 32,000 psychological line, and back up. It then finished for the day at 32,129.94 basis points, after touching intraday lows of 31,827.24bps.
Under the prevailing market situation, playing dividend stocks is advisable with all eyes on consistent dividend paying stocks, knowing the qualification and markdown date to guide movement of funds from one stock to the other. We expect trading for this month, the peak of earnings reporting season to influence the general market positively on the strength of more impressive numbers and high payout ratios to attract liquidity.
Monday’s market technicals were positive and mixed, with volume traded lower than previous session in the midst of positive breadth and sentiments, as revealed by Investdata’s Daily Sentiment Report, showing a buying volume of 100% and sell position of 0% on a daily transaction volume index for the day at 0.63.
The momentum behind the day’s market performance was down, despite the up market as shown by money flow index at 61.73 points, down from previous day’s 64.18bps, indicating that funds are still leaving the market.

Index and Market Cap
NSE All Share index at the end of Monday transaction gained 302.70bps, closing at 32,129,944ps, after opening at 31,827.24bps, representing a 0.95% growth. Market capitalization went up N112.88bn to close at N11.98tr, from the opening value of N11.87tr, representing a 0.95% value appreciation.
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The uptrend was driven by gains recorded in medium and high cap stocks like: Dangote Cement, Guaranty Trust Bank, CCNN, Zenith Bank, UBA, Access Bank, FCMB, International Brewery, Dangote Flour, Transcorp, Diamond Bank and Dangote Sugar, among others. This impacted positively on Year-to-Date gains to 2.23%, while market capitalization gained N258.39bn, from the year’s opening level of N11.72tr, representing a 2.23% growth.

Mixed Sector Indices
All sectoral indices were largely bullish, except for the NSE Insurance and NSE Oil/Gas that closed red. Market breadth was positive as advancer’s outnumbered decliner in the ratio of 25:10.
Market involume and value were down by 33.18% and 30.40% respectively to 228.48m shares worth N2.61bn, as against previous session’s 341.95m units valued at N3.75bn, which was driven by financial services and conglomerates stocks like: Diamond Bank, UBA, Zenith Bank, Access Bank, and Transcorp.
McNichols and Cutix were the best performing stocks, gaining 9.8% and 9.76% respectively to close at N0.56 and N2.25 per share on the offer of five kobo dividend payout and low price attraction. The flipside was led by PZ Cussons and Livestock Feeds, which shed 9.67%% and 8.96% respectively to close at N12.15 and N0.61 each, on profit booking.

Market Outlook
We expect improved sentiment and more earnings reports to influence the general market. Especially when the numbers and rewards beats expectation, despite profit taking and volatility that will continue. Investors and traders also should continue their repositioning for the 2019 dividend declaration season and post-election rally expected to shape market performance in the interim. We advise cautious trading and investingwhile positioning in fundamentally sound equities.
Volatility will also continue as investors and fund managers reposition their portfolios, with eyes fixed on earnings reports, but 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

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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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