Market Update for November 6, 2018
Tuesday on the Nigerian Stock Exchange was a positive session, as the market sustained its volatile mood, reversing the previous day’s down market on the strength of price appreciation by high cap stocks amidst portfolio reshuffling ahead of year-end rally and 2018 full year reports due in the first quarter of 2019.
The NSE benchmark index opened on a little gap up in the morning session as the indicators continued an up-down movement until mid-morning and into midday when it pulled back. At that point, it retested the strong support level again after touching 31,949.33 basis points, same as in September 13, 2018, before rebounding in the afternoon, hitting intraday highs of 32,212.00bps. The index however closed for the day at 32,154.03bps on low traded volume, gradually forming a three- motive wave after recovering all of the losses for the session.
The recent upturn in inflation rate as reported by NBS in August and September, is likely to continue, especially as the expected October inflation figure is projected to be about 11.32%. However, the rate for subsequent months could rise even faster on the strength of new minimum wage of N30,000 reportedly reached between the Federal Government and labour unions on Monday.
If implemented, the new minimum wage is expected to enhance purchasing power of workers across the country. We are aware that many states are unable to pay the existing N18,000 minimum wage and are indeed owning several months of workers’ salaries and pension.
Tuesday’s market technicals on the NSE were positive, but weak with low traded volume, negative market breadth and positive sentiments, as revealed by Investdata’s Daily Sentiment Report, showing a buy position of 78% and sell volume of 22%. The volume index for the day’s total transactions was 0.67.
Momentum behind the day’s market performance was strengthened again after nosediving to reflect buying interest in the course of portfolio rebalancing. Money flow index for day rose to 50.69bps, from previous day’s 45.19ps, indicating that funds are entering some stocks in the midst low liquidity.
Index and Market Cap
The All Share Index on Tuesday gained 105.85bps to close at 32,154.03bps, after opening at 32,048.19bps, representing 0.33% rise, just as market capitalization improved by N38.64bn, closing at N11.74tr, from an opening value of N11.7tr, a 0.33% value gain.
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The day’s upturn was attributed to the buying interest in low, medium and high stocks like: Nestle, Nigerian Breweries, FBNH, Zenith Bank, UBA, Stanbic IBTC, CCNN, FBNH, Dangote Flour, and Dangote Sugar. This impacted on the Year-to-Date returns, as the loss position improved to 15.92%, while market capitalization dropped by N1.87tr, representing 13.87% drop, from the year’s opening value.
Mixed Sectors Indices
Sectorial indexes were largely bearish, except for the NSE Consumer and Industrial Goods that closed green, just as market breadth stayed negative with decliners outpacing advancers in the ratio of 23:14, to halt the previous day’s bear market.
Market activities were mixed as volume dropped by 5.18% to 149.65m shares, from Monday’s 157.83m units; while value climbed by 59.56% to N2.79bn from N1.75bn. Transaction volume was boosted by financial service stocks like: Fidelity Bank, Regency Insurance, Guaranty Trust Bank, FBNH and Zenith Bank.
CCNN and Nahco were the best performing stocks, gaining 9.81% and 5.29% respectively to close at N20.15 and N3.58 each on a low price attraction and impressive Q3 numbers. On the flip side, Fidson Healthcare and Mutual Benefits lost 10% each to close at N4.50 and N0.27 each on profit taking
Market Outlook
We expect the current trend to continue as investors digest company numbers, given that there is no new incentive for the market in November, unless and until there is a change in the narrative.
The ongoing volatility will persist as Q3 numbers assist investors and fund managers rebalance their portfolios, while watching the political space and ahead of the expected Q3 GDP and full year company earnings position. These are likely to drive prices north, or south, while determining market direction before or after Presidential Election.
Investors should review their positions in line with 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 volatile amidst mixed company, economic and market fundamental.
Invest 2019 Traders & Investors Summit
Investdata Consulting Ltd presents The 8th edition of its TRADERS & INVESTORS SUCCESS SUMMIT tagged: INVEST 2019, designed to be the biggest yearly workshop for stock market traders &investors in Nigeria.
Theme: Adopting The Billionaire’s Mentality In Stock Selection.
Venue: Ostra Hotel & Hall, Alausa, Opposite NNPC Gas-Plant Ikeja Lagos.
Date: Saturday, December 8, 2018.
Time: 10a.m.
Theme: Best Returns In 2019 & Beyond: Adopting The Billionaire Mentality In Stock Selection
Sub-Topic
1. Pre-election year performance Review and post-election Investing opportunities
2. Simple Strategies for picking undervalued stocks With Fundamental & Technical Tools
3. Psychology of Equities Trading For Managing Positions & Money
4. Mastering Market Dynamics & Dividend Techniques To Grow Your Income in 2019
5. Picking the Right Stocks to Retire Rich In Financial Independence
6. Nigeria’s Post Election Economy & 2019 Sectoral Analysis
7. Understanding the big picture of Budget Delay & Its Implication on the Economy/Stock Market
The huge decline in stocks from its January 2018 peak has not necessarily been due to the fundamentals of quoted companies, but investors flight for safety over uncertainties arising from next year’s general elections, participants will learn from experts/facilitators at the workshop, how and where to position for juiciest returns, depending on investment horizon.
Previous editions have attracted participants from diverse class of investors and traders, as well as several world-class professionals and experts as speakers and facilitators, including representatives of quoted companies and stockbroking firms. The event has helped market players to effectively time opportunities for higher returns in the New Year.
In today’s equity market, there is wisdom in being able to identify ‘buy’ opportunities very early and sell for maximum returns, while minimizing loss in any market situation.Understanding the dynamics of the stock market during any cycle is the very key to successful trading and investing. For this to happen,we must arm ourselves with knowing the essential driving forces behind the market as they move up and down.
At the INVEST 2019 TRADERS & INVESTORS SUCCESS SUMMIT (TISS) you will discover some seldom considered aspects of investing and trading that can help you bag more big winners, while ratcheting down the number of losers in 2019 and beyond.
This summit will provide answers to these six crucial questions AND others
• What exactly is it we are trying to do as traders & investors?
• What occurs every post-election year that we wish to take advantage of?
• What are the prevailing market moves and who are the dominant players?
• What is ‘smart money’ doing?
• Where should we look to enter the market or exit?
• Is it the same every day, season and year?
When you answer these important (and frequently overlooked) questions correctly, your trading/investing skills will launch into new levels.
For Registration kindly send YES or REG to 08028164085, 08032055467, and 08111811223 now for details.
Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
