Market Update for April 3

Trading activities for the second quarter of this year kicked off on a negative note on the floor of the Nigerian Stock Exchange, Monday on bearish sentiments as revealed by volume index of 0.41 with buying position of 7%, while selling volume was 93% on a very low volume of trade for the day.
The market dip was significantly impacted by value loss in medium and high cap stocks like Total Nigeria, Guaranty Trust Bank, Dangote Cement, Nigerian Breweries, (which during the session notified the investing public of its scrip dividend option), Access Bank and Stanbic IBTC. Despite the modest retracement in Purchasing Managers’ Index (PMI) for the month of March, as released that morning by the Central Bank of Nigeria (CBN) of 47.7 points from 44.6 recorded in February, notwithstanding that it is still below the break-even index of 50 points for the three consecutive months of the year.
Meanwhile, the composite NSE All Share Index shed 243.34 basis points to close at 25,273.03, after opening from 25,516.34, representing 0.95% decline on a very low volume traded, when compared to the previous day’s figure and average daily traded volume of the market.
Similarly, market capitalisation for the day dipped by N84.19bn to close at N8.74tr, from an opening value of N8.83tr, representing 0.95% lost in value.
The value loss recorded by the medium and highly capitalized stocks push the All-Share index’s year-to-date negative position to 6.00% and market capitalisation adjusted to N502.16 billion, representing 5.49% loss YTD, from the opening value.
Market breadth for the day remained strong and positive as the number of advancers outpaced decliners in the ratio of 28:7 to continue it two trading sessions of down markets. Market activities in volume and value were down by 83.55% and 99.28% respectively to 97.69m from N593.87m and value to N682.76m.
This activity was driven by the banking sub-sector by the shares of Fidelity Bank, Diamond Bank, UBA, FBNH and Stanbic IBTC that dominated the day’s trading as the most traded equities by volume.
The NSE All-Share index and all sectoral indices were down, except for the NSE Insurance, NSE Lotus and NSE Oil/Gas that were higher to close the day trading.
During trading, more 2016 full year results were released, just as more companies filed for delay in submission of their 2016 financials.
The first quarterly earnings report for the December year end accounts was released by Infinity Trust Mortgage Bank to kick start the season earnings reporting.
UACN led the advancers log with 10.23% to close at N14.33, driven by market forces and expectation of dividend, followed by NASCON with N10.14% to close at N7.82 on a dividend payment of N0.70 kobo; while petroleum marketing companies topped the decliners log, led by Eterna and Total losing 5.00% and 4.89% respectively.
NSEASI DAILY TIME FRAME

The index on a daily time frame pulled back on bearish sentiment on mixed financials and low volume trade to reflect the investing community’s concerns over the numbers released so far as investors and analysts interpret the corporate earnings and actions to know where to swing as more economic data are expected in this quarter, going forward. The Index action is retracing down to the bearish channel on a low volume which may signify the activity of smart money again as they reposition some of their portfolios.
As few quarterly earnings reports are likely to be in the market this period, being the kick off for submission, we expect the trend to oscillate depending on market forces and the strength of the numbers presented, because these reports will give direction or pointer as to where the 2017 financial year is headed.
The index candlestick formation pattern as at close of trade is somewhat not giving any direction yet, but let us see how it plays out this morning’s as accumulation and repositioning for second quarter continue in expectation of Q1 2017 results.
Meanwhile, money flow index is looking down, indicating that fund is exiting the market, while the current trending ability of the market on a daily time frame is weak, as ADX is below 20 at 15.52, MACD is still bullish and has remained so over the past 18 trading sessions, while RSI is reading 46.18 as at the close of trading.
Again the market is still searching for direction as Q2 kicks off on a bearish note. You may want to keep track of all our research, news, analysis and commentaries so you can make the best investment decisions possible in this market.
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