Market Update for July 18, 2018
The bear dominance that continued up till midweek and over the last six months, despite the influx of Q2 earnings report by quoted companies, has made equity trading on the Nigerian stock Exchange even more unpredictable in a market that attained a five-year high in January when it peaked at 45,321.82 basis points.
Since then, the NSE’s benchmark All-Share index has been on a downtrend after various failed attempts at rebounding, due to continued sell-offs resulting from profit booking, investor reactions to the interest hike in the U.S that piled pressure on emerging markets. There has also been the economic slowdown as seen through the lenses of various indicators, which has been made worse by the political uncertainties ahead of the nation’s 2019 general elections.
All of these have contributed to dragging the NSEASI down to its six-month lower lows at 36,608.11 on the exchange on Wednesday, into the afternoon, when the market retraced up marginally to close 36,748.18. The market simply lacked the much needed energy and enthusiasm.
The day trading started out with a little pop to the downside, hitting a major recent support level at midday when it touched intraday lows of 36,608.11bps from highs of 36,963.70bps, before rebounding in the afternoon to roundup the session at 36,748.18bps on a low traded volume and mixed earnings performance. The market extended its 4-wave corrective trend, followed by 5-wave advance that ensued right after the noon hour. Wema Bank, Trans nation-wide Express and released their Q2 numbers, while Linkage Assurance announced a 5 kobo dividend per share.
Midweek market technicals were negative and mixed with low transaction volume in the midst of improved market breadth and sentiments despite closing negative, as revealed by Investdata’s Daily Sentiment Report, showing a ‘sell’ pressure of 61%, while ‘buy’ position at 39%. Volume index was 0.58 of the day’s total transactions.
The momentum behind the day’s market performance was weak also, as reflected in the money flow index at 35.44 points, a marginal improvement over previous day’s 33.34points, an indication that liquidity in the market remains weak, despite the inflow of funds as at close of business.
Index and Market Cap
At the end of the day trading, the NSE All Share index shed 213.52bps, closing at 36,748.18bps, after opening at 36,963.70bps, representing a 0.58% decline, just as market capitalization, fell by N78.07bn to close at N13.31tr, from an opening value of N13.45tr, also representing 0.58% value depreciation, to further deepen the loss position of investors.
If you haven’t joined Investdata Buy & Sell Signal setup, where you can look over our shoulder and follow to know when to hold cash and take advantage of the watchlist of stocks for different investment purposes that you may position in, as the market oscillate. To register and become a member send Yes or stocks to the phones numbers below. The number of stocks on our watch list has increased due to the prolonged correction. Take advantage of this service to buy right and sell right.
Market downturn continued at the midweek as a result of losses recorded by low, medium and high cap stocks like Nigerian Breweries, Guaranty Trust Bank, Lafarge Africa,, FBN Holdings, Oando, Stanbic ITBC and Honeywell Flour. These impacted negatively on the NSE’s Year-to-Date return now at a negative 3.91%, just as market capitalization, within the period lost N297.42 billion, same as 2.19% below the year’s opening value.
Bearish Sector Performance
Sectorial performance indices were largely bearish except for the NSE Insurance and consumer goods that closed higher, while NSE banking was lower by 2.0% topped worst performance. Market breadth was negative as decliners outweighed advancers in the ratio of 23:20, to continue it three trading session of down market.
Market activities were down in volume and value by 11.05% and 31.29% respectively to 181.23 million shares worth N1.64 billion from the previous day 203.8 million units valued at N2.39 billion.
Transaction for the day was boosted by trading in financial services, conglomerates and petroleum stocks like Transcorp, Zenith Bank, Fidelity Bank, Oando and Access Bank that witnessed increased trading to top the activity chart.
Continental Reinsurance and PZ were the best performing stocks, topping the advancers’ table after chalking 10% and 9.74% respectively to close at N1.65 and N16.90 each, due to low price attraction and dividend expectation.
On the flip side, FBNH and Oando were the worst performing, losing 9.76% and 9.56% respectively to close at N9.25 and N4.75 on market forces and negative sentiments and what may seem investor dissatisfaction with the recent explanations given by its management over the lingering challenge the bank has with a core stakeholder.
Market Outlook
Reversal is imminent if more positive Q2 earnings reports hit the market today and beat market expectation, considering undervalued state of equities and high yields. Investors should review their position in line with their investment goals and act as events unfolds in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value, especially during this season were Q2 interim dividend payment are expected in the market arena very soon.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamental.
Investdata Stock Market Training Workshop
The Date: On Saturday, July 28, 2018
Venue: Ostra Hall & Hotel Alausa Ikeja Opposite NNPC Gas Plant
Theme: Comprehensive Stock Trading & Investing Toolkit for Rest of 2018
Sub Topics
Review of 2018H1 Market & Economic Performance: How Fiscal Reforms and Stimulus Will Support the Market/Economy in 2018H2.
In this presentation, the speaker will discuss how historically the Fiscal and Monetary policies have influenced Nigeria’s stock market, the implications for the second half and it would drive equity prices higher as recovery continues, impact of the new NSE market Structure.
2018H2 Trading Checklist: How to Find Winning Stocks in Nigeria’s Volatile Equity Market
After the prolonged correction, volatility is here to stay for the rest of 2018. Is it time to start worrying about losses suffered so far, a flattening yield curve or time to relax due to the outstanding earnings season? Better yet, is there a way to harness increased volatility to your advantage? Our facilitator, a stock market expert will show you how to handle increased volatility in 2018. He’ll offer insights into forces impacting today’s market. He will share, using real-time examples, his ultimate checklist to finding winning stocks propelled by volatility. This simple strategy allows you to quickly evaluate stocks and to better time entry and exit points, while understanding market forces moving your portfolio.
How To Generate Consistent Superior Equity Returns and Income With Dividend Stocks
Here, the expert will discuss his approach to generating equity income by investing in undervalued dividend stocks, what he looks out for when trading dividend stocks at a discount to historical valuations on multiples of price to sales, earnings, cash flow, book value, and enterprise value to EBITDA. In addition, he requires companies to have positive operating cash flow over the past 12 months, with dividends covered comfortably by cash flow.
Powerful Patterns and Effective Strategies for Trading Shifts in Market Volatility
Recent and ongoing changes in market volatility present both risks and opportunities for discerning traders. Learn some of the most effective strategies for taking advantage of the high-probability trading opportunities available in equities, while minimizing risks associated with stock market trading. The six most powerful patterns in the market to trade, how to know which patterns and strategies to specialize in for consistent results and the critical difference between oscillating and momentum patterns.
Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
