Market Update for April 4
Again, Nigeria’s equity market extended its negative outing; closing lower at the end of Thursday’s trading session, which made it four consecutive days of losses, although on a reduced momentum. The recent bleeding on the Nigerian Stock Exchange that had ushered in the second quarter resulted from the market’s major problem of structure and over dependence on foreign investors. There is an urgent need to therefore intensify wealth and investment education, especially aimed at attracting new generation and class of domestic retail and institutional investors and traders.
State governments must also get involved in encouraging the officials to get involved as a way of encouraging the savings and investment culture for to tackle this problem, besides helping to promoting unemployment and insecurity that is threating many businesses in Nigeria today. This is urgent, given that companies are shutting down; and some are selling their assets to leave what they consider an unfriendly operating environment.
The mismatch of foreign inflow into the market has been mainly responsible for the ongoing pullback that seem to signal another market crash, due to the high volume traded within this short space of time. We also note that smart money will take advantage of the low price to position, as domestic investors continue digesting the mixed and weak 2018 corporate earnings ahead of Q1 2019 numbers. This is in the hope of pro-growth economic policies and reforms from government as appointment of new cabinet is underway, line with President Muhammadu Buhari’s promise to appoint technocrats in the next dispensation.
Thursday trading started on a gap down in the morning which lingered all day to touch intraday low of 29,548.65 basis points from a high of 29,662.091bps on selloffs across sectors, before retracing up slightly to close the session lower at 29.553.12bps. This corrective wave 5 was extended on a negative sentiment approaching a strong support of 29,336.80bps in January 9.
Market technicals for the day were negative and mixed with high volume traded, although marginally lower than previous day’s in the midst of weak market breadth. There was high selling pressure as revealed by Investdata daily sentiment report showing a sell volume of 96% and buy position of 4% of the total daily transaction volume index of 1.32.
Energy behind the day’s market performance were very weak, as shown by money flow index at 7.23 points, from previous day’s 7.55bps. This is indicating a fundamental problem of lack of fund, which is responsible for investors’ seeming lack of response to corporate earnings.
Index and Market Cap
The composite NSE All Share Index, on Thursday, Shed 115.61bps to close at 29,553.12bps, after opening at 29,668.73bps, representing a 0.39% decline, while market capitalization lost N43.42bn to N11.1tr, from its opening value of N11.14tr, representing 0.39% value loss.
Attention: Join Investdata buy and sell signal setup to get all our in-depths analysis on the picture and to get access to our carefully created watch list. To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. The number of stocks on our watchlist has increased due to the prolonged market correction. Take advantage of this service to buy right and sell right during this earnings season and beyond.
The downturn was driven by selloffs in all sectors as stocks like: Dangote Cement, 11 Plc, Unilever, CAP, UACN, Eterna, Access Bank, Dangote Sugar, Dangote Flour, Wema Bank and Transcorp suffered losses, impacting further on Year-to-Date loss which extended to 5.97%. Market capitalization drop increased to N620.34 billion, or 5.29%, from the year’s opening level of N11.72tr.
Bearish Sector Indices
All sectoral performance indices were in red, betraying the negative sentiment and selloffs, just as market breadth was negative as decliners outnumbered advancers in the ratio of 19:11.
Market activities in volume and value were down by 8.02% and 48.94% respectively, to 542.58m shares worth N5.66bn from previous day’s 542.58m units valued at N5.66bn. Volume was driven by financial services stocks like: Sterling Bank, Chams, FBNH, Zenith Bank and UBA.
The best performing stocks for the day were Chams and Forte Oil that topped the advancers chart with gains of 10% and 9.82% respectively to close at N0.22and N27.40 per share on the strength of 3kobo dividend and market forces. On the other hand, Chemical Allied Products and Unity Bank lost 9.89% and 9.30% respectively, closing at N33.70 and N0.78 each, on market forces and weak balance sheet.
Market Outlook
We expect a slowdown in the current trend as players reposition for Q1, which will give direction into how this year could turn out after seeing the 2018 financials. We note also that there are more company’s notifying the NSE of their closed period for first quarter 2019 earnings reports.
Investors look to 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.
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:
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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
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• 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 strategiesto 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
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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
