Nigerian Equity Indicators Stay South, As Investors Await Fiscal Initiatives To Propel Growth, Devt

Market Update for September 11

Nigeria’s stock market started the week weak as revealed by poor technicals that consolidated the previous day downtrend. The pre-market open was full of mixed expectations from participants at INVESTDATA seminar held in Abuja over the weekend where investors were taught how to protect their portfolio and profit from market corrections, especially with the government yet to make any form of reform policy pronouncement or action that will give support to the ongoing economic recovery as revealed by the latest Q2 GDP data from the National Bureau of Statistics (NBS) pointing towards Nigeria’s exit from recession.
Truth be told, investors and the ordinary man on the streets are expecting to see the effects of this recovery though fragile at 0.55% in action, just as they hope it would propel growth. It is also known that the growth was propelled by the Central Bank of Nigeria (CBN) through its various interventions, particularly in the foreign exchange window of the inter-bank market, just as its sustainability is being questioned, going by the seeming ineffectiveness of the fiscal authorities, leaving the entire system in a state of confusion. This has gradually affected confidence in the market and the economy, at a time the government’s ability to faithfully implement Nigeria’s 2017 budget remains in doubt.
The index opened Monday with a slight gap up in the morning, before pulling back at midday to hit intra-day lows, owing to losses suffered by high cap stocks which were not weighty enough to push it into new lows, amidst a low volume traded as investors are still looking to see actions and moves by the economic managers that would guaranty sustainable growth going forward.
Selling pressure however continued as revealed by the volume index of 0.39, with a buying position of 11% while selling volume was 89% of the day’s total transaction to support the down market.
Meanwhile, the All Share Index shed 292.30 basis points to close at 35,664.94 point from the 35,953.44 points opening level which represented 0.81% decline, just as market capitalisation for the day fell by N100.75 billion to close at N12.29tr, from N12.42tr in the previous session, representing a 0.81% value loss to continue the two day bear transition.
The downturn in the share prices of Dangote Cement, Nestle, Flour Mills, Guinness, Okomu Oil, Presco, Guaranty Trust Bank and Double One Plc impacted negatively on the indicators to reduce the composite All-Share Index’s year-to-date returns to 32.71%, just as gain in market capitalisation fell to N3.05tr within the period, representing a 32.94% 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 24:20 on a low volume of trades to sustain a two-day down market.
Market activities in terms of volume and value were down by 24.73% and 29.51% respectively to 114.77m shares, as against previous day’s 152.47m units valued at N2.17bn from the N3.08bn recorded in the previous session.
Transaction in the shares of Zenith Bank, Access Bank, UACN Property, Diamond Bank and C & I Leasing topped the volume chart.
At the close of the day’s trading session, Newrest ASL topped the advancers’ log with a 4.87% gain, following which it closed at N6.25 per share on market forces ahead of its Q3 numbers; followed by Transnational Corporation of Nigeria (Transcorp) with a 4.76% notch at N1.32 per share also on the back of positive market sentiments and expectation of reforms in the nation’s power sector to further boost its numbers in the coming months of the year.
On the flipside, Okomu Oil lost 4.92% to close at N59.90 on a profit taking, followed by McNicholes that shed 4.55% to close at N1.26 per unit on market forces.

Technically, the week opened weak, on a high volatility that is likely to continue as trading activities begin this morning, with investors likely to continue standing on the sidelines, amidst profit booking and repositioning in hope that the positive macro-economic indices will drive optimism in equity investments ahead of 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 knowledgeably.

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 account number 1013033032 domiciled at Zenith Bank Plc. Afterwards, kindly send payment details to 08032055467 or 08111811223.

Ambrose Omordion
CRO | Investdata Consulting Ltd
Tel: 08028164085, 08032055467

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