Nigeria’s Equity Market Seeks Positive Economic, Company Data To Inspire Reversal

Market Update for June 28, 2018

The nation’s equity market on Thursday extended its bearish sentiments that had lingered for three consecutive days, despite the inflow of March year-end earnings reports and notification of closed period for half year results. At this point, the market is seriously waiting for a positive economic and company news to reverse the current trend as many players are trading cautiously to minimize their losing positions.

Trading started with a little move to the downside, and further pullback to retest the recent strong support level at 37,700.01 basis points in the midday as highly capitalized stocks lost grounds to breakdown the sideways ranging at 37,988bps to 37,962bps movement in the previous sessions.  Intraday volatility was high as the benchmark index touched lows of 37,708.50 from highs of 37,977.25 and rallied back up in the late afternoon to close session at 37,733.44. One of the March year-end accounts- Redstar Express released its fully result (READ HERE), offering 40 kobo dividend, which market is likely to react to between today and next week, while Honeywell and Flour Mills are expected to hit the market today.

Thursday’s market technicals were negative and mixed as traded volume was high in the midst of negative market breadth and sentiments, as revealed by Investdata’s Daily Sentiment Report showing a ‘sell’ pressure of 91% and ‘buy’ volume of 9% on a volume index of 1.24 of the day’s total transactions.

Momentum behind the market performance were weak and low to reflect on the money flow index at 22.92 points from the previous day’s 31.17 points. This is an indication that funds are still leaving the market at the end of Thursday trading. This also revealed the wait and see attitude of bargain hunters who slowed down in their positioning ahead of the Q2 earnings season and implementation of new pension assets classification funding that will support long-term stability.

Index and Market Cap                                       

The benchmark index on Thursday shed 230.49bps, closing at 37,733.44bps, after opening at 37,963.93bps, representing a 0.61% decline on a high volume that was higher than the previous day’s. Similarly, market capitalisation lost N83.56bn to close N13.67tr from an opening value of N13.75tr, representing 0.61% value loss.

If you are hunting for the right stocks to buy on this oscillating trend, join Investdata Buy & Sell Signal setup. We have a watchlist of stocks for different investment purposes that you may position in, as the market sets for another phrase of recovery. To register and become a member send Yes or stocks to the phones numbers below. Our watch list has increased due to the prolonged correction before now, take advantage of this service to buy right and sell right.

The downturn recorded was due to price depreciation in low, medium and high cap stocks like Dangote Cement, Guaranty Trust Bank, Zenith Bank, FBNH, Dangote Flour, Oando, Diamond Bank, Sterling Bank, Fidelity Bank, and Wema Bank. These impacted negatively on the NSE’s Year-to-Date return, pushing it further down to 1.33%, while in market capitalisation gain for the period stood at N4.68bn, a 0.25% rise above the year’s opening value, on the impact of new listings earlier in the year.

Bullish Sector Performance

Sectorial performance for the day were  seemingly bullish, except for the NSE Banking that  was down  while the NSE Insurance, Industrial and Consumer goods were up as Law Union Insurance, Aiico, Lafarge Africa, Dangote Sugar Honeywell and Flourmill appreciated in value. Market breadth was negative as decliners outweigh advancers in the ratio of 20:16 to keep the bear market running.

Market activities were up in volume and value by 11.49% and 39.99% respectively to 414.93 million shares worth N4.45 billion from the previous day’s 372.24 million units valued at N3.18 billion. The day’s volume was boosted by trading in financial services and consumer goods stocks like Champion Brewery, Sterling Bank, Zenith Bank, Guaranty Trust Bank and FBNH that witnessed increased trading to top the activity chart.

Honeywell and Law Union Insurance were the best performing stocks for the day, that topped the advancers’ table, with 9.52% and 9.3% respectively to close at N2.41 and N0.84 each, due to market sentiments and expected full year results

On the flip side, Equity Assurance and Wema Bank were the worst performing, losing 4.55% and 4.11% each to close at N0.21 and N0.70 on market forces.

Market Outlook

We foresee a reduction in the losing streak as more impressive March accounts earnings reports hit the market today being the last trading day of the week. Volatility is likely to continue while investors and fund managers reposition for end of the quarter to earn good fee and commission as equities remain undervalued with higher yields. Investors should review their position in line with their investment goals and take action as events as it 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 less earnings are released ahead of march full year earnings release and 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 fundamentals.

Save The Date: Investdata Stock Market Training Workshop

                                 On Saturday, July 28, 2018

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.

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

Tel: 08028164085, 08032055467