Market Update for June 8
Nigeria’s equity market continued its volatility on Tuesday after the benchmark NGX All-Share Index closed higher, reversing previous day’s loss on the back of buying interests in highly priced and medium cap stocks, in the midst of rising yields and expected May inflation reports from the National Bureau of Statistics (NBS).
Sector rotation continued ahead of the earnings reporting season on the Exchange, with investors targeting consumer goods stocks with high elasticity of demand, a factor likely to boost numbers from these companies, especially those with March and May year-end accounts, and ahead of the half-year earnings reports.
The market continued its recovery from the May pullbacks and corrections, as Tuesday’s NGX index action rebound was on an above traded volume, high buying pressure and a slightly negative breadth. The market’s low Price-to-Earnings Ratio remains a major attraction, just as many companies are likely to sustain this uptrend in earnings performance.
Market participants are also waiting to confirm a breakout of the 39,000 basis points mark, or test the level and pullback to strengthen the market’s recovery mode. Already, there are tell-tale signs that smart money is taking positions ahead of Q2 numbers in the midst of the increasing insecurity challenges and rising yields, as revealed by volume and money flow index.
Following the daily and weekly chart, the NGXASI index’s action shows a reversal and positive picture going into the month, as the market is set to rally and experience a mixed trend on profit booking, among other factors. We expect full-year and interim dividend announcements to support market fundamentals and attract more funds to the market.
Tuesday’s trading started on the downside in the morning and oscillated till midday before rebounding by the late afternoon on position taking in blue-chip stocks, among others, a situation that pushed the composite index to an intraday high of 38,881.70bps, where it closed from its lows of 38,661.47bps.
Market technicals were positive and mixed with higher volume traded than previous day’s in the midst of negative breadth and high buying pressure, as revealed by Investdata’s Sentiments Report showing 100% ‘buy’ volume. Total transaction volume index stood at 0.86 points, just as the impetus behind the day’s performance was relatively strong, as Money Flow Index read 57.59.pts, from the previous day’s 51.10pts, indicating that funds entered the market.
Index and Market Caps
At the end of Tuesday’s trading, the benchmark NGXASI gained a strong 192.72bps, closing at 38,881.70bps from an opening figure of 38,688.98bps, representing a 0.50% growth, just as market capitalization rose by N101.8bn, closing at N20.27tr, compared to its opening value of N20.16tr, also representing a 0.50% appreciation in value.
Attention: If you have not signed up for INVESTDATA buy and sell signal setup, don’t delay. We have just reduced to 8 STOCKS TO WATCH THAT ARE BUILDING NEW BULLISH BASE in our watchlist. These stocks are with double potentials to rally considering their current and oscillating mood of the market value.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling and repositioning as we await an economic reform policy to stimulate and re-track the economy again.
The day’s upturn was driven by buying interests in Dangote Cement, Okomu Oil Palm, Unilever Nigeria, Flour Mills, Vitafoam, PZ Cussons, Dangote Sugar, and Guaranty Trust Bank, among others. This impacted positively on Year-To-Date loss, reducing it to 3.45%, while the drop in market capitalization YTD reduced to N790.69bn, representing a 3.74% drop below its opening value for the year.
Mixed Sector Indices
Performance indexes across sectors were mixed, with the NGX Insurance and Banking closing lower by 1.03% and 0.05% respectively, while the NGX Industrial goods led the advancers after gaining 1.07% followed by Consumer and Energy that were up by 0.57% and 0.08% respectively.
Market breadth, however, remained negative, as decliners outnumbered advancers in the ratio of 17:15; while activities in volume and value terms rose, after stockbrokers traded 218.51m share worth N1.59bn, compared to the previous day’s 210.75m units valued at N1.5bn. Volume was driven by trades in Courtville Business Solution, Fidelity Bank, and AXA Mansard Insurance.
Okomu Oil and Learn Africa were the best performing stocks, gaining 10% and 9%, closing at N106.15 and N1.09 per share respectively on market forces and earnings expectation. On the flipside, Computer Warehouse Group and Regency Insurance lost 9.42% and 8.16% respectively, closing at N1.28 and N1.38 per share, on selloffs.
We expect a mixed trend as profit taking and positioning continue in expectation of positive news, economic data and others in the midst of oscillating oil price and global economic and stock market recovery across climates, as high yields in the fixed income market depress equity market. We also expect the ongoing vaccination to support global and domestic economic recovery that will support the market and give direction.
The banking sector and others remain attractive on the back of the prevailing low prices, despite the Q1 mixed numbers.
The World Bank Group, on Tuesday, released its June 2021 Global Economic Prospects, showing that the global economy could expand as much as 5.6% this year, while Nigeria’s GDP could grow at a modest 1.8% rate in 2021, and then 2.1% next year. This is however dependent on certain internal and external conditions the report listed (READ MORE)
Again, the way to go is: Target dividend-paying stocks and fundamentally sound companies with growth prospects in 2021, looking the way of mispriced equities ahead of interim dividend announcement. This is especially given that despite the seeming improvements, fixed income yield continues to offer negative real rate of return due to the galloping inflation.
However, the strong and faster recovery may continue, depending on market forces, going forward, as propelled by expected Q2 earnings reports, until the next MPC meeting in July.
INVESTDATA 2021Q3 MASTERCLASS
Theme: Road Map For Improved Trading Results&Enhanced Confidence
- Building Wealth with Diversified Portfolios In Amidst Economic Recovery, Stagflation Alhaji KurfiGarba MD/CEO Apt Securities & Funds Ltd
- Combining Technical Indicators & Tools With Higher Time Frame To Initiate, Manage Trades Mr Abdul-Rasheed OshomaMomoh, Head Capital Market at Trw Stockbrokers Ltd
- Volume Factors That Give Profitable Signals in Any Market Phase, or Cycle, Mr Ambrose Omordion, Chief Research Officer, Investdata Consulting Ltd
Based on the changing market dynamics and trading environment, Investdata Master class will show you how to effectively combine fundamental and technical tools to read and analyses simultaneously for a true insight into market actions and direction.
This Master Class will cover
- Selecting portfolios that beat inflation in a recovery economy
- How to read the higher and trading time frame bars for a true trading edge.
- Knowing the factor that fuel stock market trading and how its impact your portfolio.
- Entry and exit technique that get you in and out at good prices and add to your bottom line.
- Improve your chances of entering wining trades, using volume factor and analysis to see what the market is doing more clearly and with a greater degree of confidence.
Trading the equity market on minutes and day charts can be challenging, because things or events happen so fast. Volatility occurs first on the daily time frame, often with little or no warning.
Momentum indicators like RSI, MACD and moving average are useful, but most times they give false signals, making many traders miss opportunities and solid trades. But for you to pinpoint a winning trade and where smart money is moving with more accuracy, you need volume analysis and sentiment reports.
Date: July 3, 2021
Time: 9am prompt
Fee: N 50,000
However, with less than 28 days to the beginning of Q3 2021, you need a road map to navigate the quarter profitably with confidence. Don’t miss this opportunity as we countdown to July 3, 2021 for this Master Class.
During this practical session, our team of experts will reveal practical trade ideas and opportunities that you can apply or implement immediately in Q3 2021 to consolidate your gains, maximize returns and start tracking the result by yourself.
If it is your desire to be among smart investors and traders in Q3, send Yes to: the phone numbers below now.
Meanwhile, the home study packs on Comprehensive Stock Market trading course video, INVEST 2021 New Opportunities & New Paths To Profits Summit materials and 10 Golden Stocks for 2021, Strategies and How to invest profitably in this Changing Market Dynamics/ Recession, Mastering Earnings Season For Profitable Investing and Trading in any market situation/ cycles, Life Beyond COVID 19 Investment Opportunities In The Stock Market are now available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08179547605, 08111811223 now.
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08179547605