Market Update for Feb 14
The current bearish mood of the Nigerian Stock Exchange (NSE) extended its two-day run for the week as investors and market players rebalance their portfolios, with the recent quarterly earnings revealing the parlous state of many companies and different sectors, given insight into what is likely to happen along that line as the 2016 full year earnings reporting enter its peak very soon.
Stocks with low Dividend Yields as a result of high price and dwindling earnings are likely to decline this season, companies that are also likely to cut or not pay dividend at all due to weak earnings or negative numbers will equally drop during this earnings season. The expected inflation figures are not likely to drop or remain flat as long as price of goods and services continue to look up due to increase in energy prices with trickle down effects on transportation and production costs.
Meanwhile, the composite NSE All-Share Index shed 212.12 points to close at 25,032.17 points from an opening figure of 25,244.29 points, representing a 0.84% decline on low volume of trades. This dip was boosted by price loss suffered by high cap stocks like Nigerian Breweries, Nestle, Chemical & Allied Products, Guinness and Unilever to continue the bear transition on negative sentiments.
Buying position was 13% and selling volume of 87%, to close the day, just as market capitalisation dropped by N73.41 billion to close at N8.66 trillion from its opening value of N8.74 trillion, totaling N106.44 billion loss in just two trading day.
As stock prices close lower, NSE All-Share index year-to-date negative position dip further to 6.93% on the strength of high cap stocks that lost value. Market capitalisation for the same period adjusted downward by N583.76billion.
Market breadth was positive and flat as the number of advancers outpaced decliners in the ratio of 15:14 on a down market.
Traded volume and value for the day were up by 2.10% and 38.41% respectively, to 144.89 million shares from 141.92 million units; and N1.91 billion from N1.38 billion in the previous trading session.
Transactions in Dunlop and banking stocks like Sterling Bank, Access Bank, Fidelity Bank and Zenith Bank dominated the activity chart as most traded equities by volume.
The NSE All-Share Index and all sectoral indices closed lower.
At the end of the day, FO topped the advancers table with 5% to close at N56.70, followed by PZ Cussons with 4.92% to close at N12.16, on the decliners table, Eterna Oil led by 4.99% to close at N3.24, next on the table was NB losing 4.99% to close at N112.82 per share.
Also, during the day trading ETI notified the investing community of its partnership with Africa bank of import and export to promote trade in Africa. Read here: https://investdata.com.ng/afreximbank-eti-sign-500m-mou-finance-intra-african-trade-investment/
DAILY TIME FRAME NSEASI
NSEASI on daily time frame has finally broken the descending triangle chart pattern and price action has come below the pre-OPEC agreement boom and Santa Claus rally and is now heading below the 25,000 psychological line if sentiment remains negative. The low volume traded also signals accumulation by smart money, especially as the market is on its oversold region, a signal to the fact that bottoming is imminent.
The trending momentum of the market on a daily time frame is strong, as ADX is below 20.
As you watch the market to retrace, position in value stocks that are likely to pay dividend.
Look the way of these stocks to average down or buy for medium term.
UCap Aiico, Zenith, UBA, Total, Presco and Eterna
