Nigerian Bourse Remains Weak Amidst High Volatility Despite Amidst Growth

Market Update for September 13

Nigeria’s equity market on Wednesday closed higher after three consecutive trading sessions of down market ahead of August inflation data expected to be released tomorrow by the National Bureau of Statistics (NBS). The figures are likely to be slightly down or flat, against the backdrop of the fact that the poor implementation of the 2017 budget by the Federal Government, even as cost of transportation remains high, despite the claim that petrol price has dropped, due to the deplorable conduction of Nigeria roads which continues to affect movement of agricultural produces from farms to city centres, thereby keeping food prices high in a harvest season.
The NSE All-Share index opened midweek’s trading slightly up in the morning, before pulling back at midday to hit intra-day low of 35,221.27 point, due to losses suffered by high cap stocks as the investing public continued to separate the reality and fiction. This is just as demand remained weighed down as the economy continues to recover from recession and there is nothing new to drive speculative activities in the market at a time quarterly and June year-end dividend paying stocks have unveiled and since delivered on their promise.
The market however closed marginally high by afternoon as demand for consumer goods turned positive to influence the market benchmark index positively, despite the low volume traded and weak technicals that had persisted in the recent weeks.
The double bottom chart pattern formed on a daily time frame that were mentioned in the Tuesday’s update supports reversal if sentiment remain in positive direction as market opens this morning to signal market recovery again.
Buying pressure in the market on Wednesday exceeded selling pressure as revealed by the volume index of 0.43, with a buying position of 100%, while selling volume was 0% of the day’s total transaction to support the up market.
Meanwhile, the composite Index NSEASI gained 66.82 basis points to close at 35,46434 from the 35,397.52 points opening level which represented a 0.19% growth, just as market capitalisation for the day went up by N23.03bn to close at N12.22tr, from N12.2tr in the previous session, representing a 0.19% value gain to halt the three days losing streak.
Price appreciation in consumer goods stocks like Unilever, Nestle, NB, Dangote Sugar, Cadbury and others impacted positively to boost the All-Share Index’s year-to-date returns to 31.97%, just as rise in market capitalisation YTD was up to N3.01tr, representing a 32.10% rise above the year’s opening value.
Market breadth for the day remained negative as the number of decliners outnumbered advancers in the ratio of 21:16 on a low volume of trades to reverse the bear transition.
Market activities in terms of volume and value turned down by 67.90% and 69.74% respectively to 119.9m shares, as against the previous day’s 359.35m units, valued at N1.74bn from the N5.77bn recorded in the previous session.
Transactions in the shares of Access Bank, Zenith Bank, Fidelity Bank, FBNH and Oando topped the volume chart.
At the close of the day’s trading session, Unilever Nigeria topped the advancers’ log with a 4.76% gain to close at N44 per share on market forces and improving earnings; followed by NEM Insurance with a 4.76% notch at N1.10 per share on a positive market sentiment.
On the flipside, Presco lost 4.99% to close at N60.8 on profit taking, followed by Oando that shed 4.89% to close at N6.42 per unit on profit taking.

TODAY’S OUTLOOK
Technically, the market so far is weak, on a high volatility that is likely to continue this morning as trading opens until speculators return, with traders likely to remain on the fence, amidst profit booking and repositioning in hope that the positive macro-economic indices will drive optimism in equity investments ahead of August inflation figure, Q3 earnings season and year-end. We expect the Nigerian government to review its 2017 budget implementation strategy and put in place some fiscal measures that will help the monetary authorities sustain the ongoing economic recovery as shown by the positive but fragile GDP, to make growth and development a reality.
However, investors need not panic if they take position based on strong numbers and future prospects of any stock as smart investors are using this correction to accumulate and increase their positions in some stocks.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that prices of stocks are looking down amidst improving economic and market fundamentals. It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Meanwhile, be reminded once more that industry potential, market timing are very important when picking a stock, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry, especially now that the economy is recovering. Market is in phases know it in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack today and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable

The workshop video is available and it can be viewed on your phone, laptop and television set. The home study pack costs N20,000 including DHL delivery at your door step. Payment should be made into Investdata Consulting Ltd, Zenith Bank 1013033032. Afterwards, kindly send payment details to 08032055467 or 08111811223.

Ambrose Omordion
CRO | Investdata Consulting Ltd

info@investdataonline.com
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