Market Update for March 1

There is no relief yet for traders in Nigeria’s equities’ market as prices plunged further Thursday, March 1, 2017, the first trading day of the new month, despite the impressive full year earnings reports recently released by high cap stocks- Zenith Bank Plc and Dangote Cement Plc. The market simply refused to be swayed by the results, or the fact that the number of companies that have so far offered what would be considered fantastic score-cards are more than the laggards.
These points to the persistently low liquidity even as the market prepares to bottom out, but not without first causing players to panic out of position. This trend may be comfortable for investors with long term goals, but not desirable for active traders.
Moreso, volatility to capture movements and trade earnings in the market is not there as prices continue to fall, since there is active trading during the session it is important that the market begins to trade wider ranges. We will see if this ultimately occurs this month as more numbers hit the market and positive news from the economic side start coming. The truth is that investors and traders are weary of worsening macro-economic indices a combination that is not helping the market in any way. The nation’s economic management team should do something to rekindle local investors’ confidence and reverse these negative trends of economic data and indices.
Consequently, at the close of Wednesday’s trading session, the composite NSE All-Share Index shed 145.98 points to close at 25,183.10 points, after opening at 25,392.01points, representing a 0.58% decline on above average trading volume that indicates strong selling pressure to reposition or hold cash since the market is struggling to retrace up even with the positive numbers been released.
The buying volume of total transactions for the day was 0%, while selling position was 100% to continue a two day bearish run.
Similarly, market capitalisation for the day fell by N50.52 billion to closed lower at N8.72 trillion, from an opening value of N8.74 trillion, representing 0.58% depreciation in value, with the market having mixed sentiments in the earnings season.
Price depreciation of medium and high cap stocks like Cadbury, Guinness, NB, Zenith, FO, UACN, Flourmills and Okomu Oil Palm, pushed the NSE All-Share index’s year-to-date negative position to 6.33%, just as that of the market capitalisation for the period adjusted to N531.53 billion, representing 5.78% loss over the same period.
Market breadth was negative and weak as the number of decliners outnumbered advancers in the ratio of 19:8 to continue the down market.
The day’s transaction volume and value were down by 48.70% and 39.34% respectively to 228.02 million of shares from 444.5million in the previous day, while value dropped to N2.39 billion against the previous valued at N3.94 billion.
Transactions in financial services stocks like Zenith Bank, UBA,UACP, NEM and GUARANTY dominated the activity chart as most traded equities by volume.
The NSE All-Share index and all sectoral indices had mix performances to closed the day’s transaction in the red except for NSE Insurance and NSE Oil/Gas that were in green.
At the end of the day, Transcorp released it full year earnings report with numbers in loss position, while Cutix made available its third quarter report to the market.
Vitafoam led the gainers table with 4.65% to close at N1.80 while CADBURY led the losers table with a loss of 8.77% to close at N7.80.
DAILY TIME FRAME NSEASI

The index on a daily time frame is back again to its strong support where it seemingly formed a double bottom and reversed. But it is still within descending triangle chart pattern and a bearish channel, struggling to continue in the same direction or reverse which will be a function of market forces when trading activities begin on Thursday.
The index before now had refused to breakdown the 25,000 psychological lines, we hope it holds this time as increasing volume traded indicates some set of investors or players are exiting their position seriously. At the same time the market is gradually going back to a more oversold region despite the fact that funds are entering the market as indicated by money flow index.
The current trending ability of the market on a daily time frame is strong, as ADX is above 20 at 23.51, MACD still bullish since the last two trading sessions while RSI reading 36.89 as at the close trading on Wednesday.
We advise you hold your position in value stocks that are likely to pay dividend and that once that had recommended dividend, but their prices are going down due to market situation.