Market Update for July 12
Trading on the floor of the Nigerian Stock Exchange (NSE) on Wednesday continued its recovery mode, strengthening the uptrend momentum as volume traded increased with improved demand for stocks as revealed by the volume index of 0.61 with a buying position of 100%, while selling volume was 0% of the total transacted for the day. The market was a technically balanced one as volume was up in the same direction as the index as market breadth was widening in positive direction also as more equities advanced in price. The benchmark index opened the day’s trading session with a marginal pullback but gapped up by midday, which it consolidated to close the day higher. The intraday resistant level of 32,910.31 on Tuesday was broken during the day’s trading despite the little different that brought them up the highs.
The rekindled interest of traders and investors in the banking stocks have supported the five straight days of bull-run as the sector index had recorded week-to-date gain of 5.35% ahead of the general market, while the industry’s Q2 numbers are likely to beat market expectations with inflation rate likely to drop further on positive economic indices expected to reduce the sector non-performing loans and boost profitability.
Stock markets around the world closed higher as the Feds testimony and outlook of modest growth in U.S economy triggered equity prices as oil price at the time inched up again.
Meanwhile, the composite NSE All-Share Index gained 153.65 basis points to close at 32,827.98 after opening at 32,827.98 points, representing a 0.47% growth on above average volume traded that was higher than previous day’s trades. Similarly, market capitalisation was up by N53.18bn to close at N11.37tr from an opening value of N11.31tr, representing a 0.47% appreciation in value.
The upturn in the shares of Nestle Nigeria, 7-Up, FO, GTBank, Julius Berger, Access Bank, Seplat, FBNH, NB and Dangote Cement impacted positively on the All-Share index, to further boost its year-to-date return to 22.72%. Also, market capitalisation over the same period improved by N2.12tr, representing a 22.93% gain above the year’s opening value.
Market breadth for the day was positive as the number of advancers outpaced decliners in the ratio of 28:15 on a better volume of trade to continue the five-day bull transition.
Market activities in terms of volume and value were up by 23.81% and 31.55% respectively to 270.86m shares from the previous day’s 218.76m and N2.77bn from N2.11bn.
Transactions in the shares of UBA, ACCESS BANK, FBNH, UCAP and ZENITH BANK topped the volume chart to close the day’s trade.
At the end of the day’s trading, 7-Up topped the advancers’ log with its share price gaining 8.82% to close at N89.23 each on market forces, followed by Neimeth with a 7.14% gain to close at N0.75 per share, on expectation of Q3 numbers.
On the flipside, University Press led the decliners’ log after dropping 9.60% to close at N2.92 each as investors react to its unimpressive full year numbers. It was followed by Champion Brewery’s 7.55% to close at N2.57 on market forces.
As the market opens this morning, expect mixed performance, against the backdrop of the fact that more companies are expected to release their numbers to continue the earnings reporting season and expected inflation figure for June. Investors should not panic on the pullbacks if they have taken position based on strong numbers and future prospects of any stock, but fix their gaze on the actual numbers and bail out when expectations are not met, thereby cutting their loss.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of the improving economic fundamentals, if the numbers will support the price reversal or continuation.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Once more, at the risk of repeating oneself, we must reiterate that industry potential is very important when picking a stock, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry, especially now that the economy is recovering. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks. Sign up for investdata buy & sell signal setup by calling 08032055467.
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1. The Toolbox of Successful Traders & Technical Analysts- Mr Meshach Ukpoma, FX Analyst/Trader
2. Outlook and Implications of the 2017 Budget & Petroleum Industry Governance Bill (PIGB) on Nigeria’s Stock Market and Economy- Abiola Rasaq, Group Head Investor Relations, UBA
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4. Understanding Market Timing to Manage Risk, Using Technical Analysis – Mr. Abdul-Rasheed Momoh, Head, Capital Markets, TRW Stockbrokers Limited
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DATE: 15 July 2017
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INVESTDATA CONSULTING LIMITED
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