Market Update for Feb 15
(Ambrose Omordion) There is no respite yet for investors who are daily concerned about the nation’s macro-economic indicators which continue to worsen with the release of each new official data. According to figures released by National Bureau of Statistics (NBS) on Wednesday for the first month of 2017, Inflation climbed to 18.72% year-on-year from 18.55% in December, while the month-on-month rate decelerated to 1.01%, from 1.05% in December 2016. Food inflation recorded its highest point since March 2009, rising to 17.82% YoY (December: 17.39% YoY), while core inflation decelerated for the second consecutive month to 17.90% YoY (December: 18.10% YoY).
The deteriorating confidence in the entire socio-political and economic environment is being fueled by negative indices and policies of Nigeria’s economic managers with their implementation style that bought about the current recession. The lulling danger of further devaluation of naira is real, as fiscal and monetary authorities fail to complement each other in the interest of Nigeria and Nigerians.
The nation’s equity market on Wednesday managed to join the stock markets of the world in closing higher, when it reversed the bearish run on the strength of value appreciation of highly capitalized stocks like Dangote Cement, Nigerian Breweries, Forte Oil and Beta Glass.
Meanwhile, the composite NSE All-Share Index gained 98.09 points to close at 25,130.26 points, from an opening figure of 25,032.17 points, representing a 0.40% growth on below average volume of trades. The mixed sentiments during the trading session was as a results of investor concerns about the economy that is pulling the valuation of stocks down, leading to loss of investments.
Buying position was 100% and selling volume of 0%, to close the day, just as market capitalisation was up to close at N8.70 trillion from its opening value of N8.66 trillion, representing 0.39% appreciation in value.
The NSE All-Share index Year-To-Date negative position reduced to 6.54% due to value gain in high cap stocks, just as market capitalisation for the same period adjusted up.
Market breadth was negative and weak as the number of decliners outpaced advancers in the ratio of 14:10 on a reversed market.
Traded volume for the day was up by 11.77% to 161.94 million shares from the previous trading session’s 144.89 million shares while transaction value was down by 5.76% to N1.80 billion from N1.91 billion in the previous trading session.
Transactions in financial service stocks like Zenith Bank, Sterling Bank, Guaranty Trust Bank Access Bank and United Capital dominated the activity chart as most traded equities by volume.
The NSE All-Share Index and all sectoral indices were up except for NSE Banking, NSE Insurance and NSE Pension that were in red while NSE AseM was flat.
At the end of the day, FO topped the advancers table with 10.23% to close at N62.5, followed by Beta Glass with 4.98% to close at N36.45 per share; while on the decliners table, Airline Services led by 4.88% to close at N2.73; next on the table was Guinness, which lost 4.82% to close at N60.92 per share.
DAILY TIME FRAME NSEASI
NSEASI on daily time frame retraced to within descending triangle chart pattern and falling channel as mentioned on Wednesday. At the same time, index movement refused to breakdown the 25,000 psychological line despite the bullish sentiment.
The low volume traded also signals accumulation by smart money, especially as the market remains in its oversold region, a signal that supports bottoming out.
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.
You may also look the way of these stocks to average down or buy for medium term: UCap. Aiico, Zenith, UBA, Total, Presco and Eterna Oil.
