Market Update for July 10
Trading on the floor of the Nigerian Stock Exchange (NSE) started the week on a positive note in continuation of a three-day recovery from the last pullback as investors reposition in value stocks. This is particularly true of interim dividend paying stocks where the banks and other financial service providers dominate among those paying interim dividend as revealed by research and history.
Monday trading session was interesting as it opened sliding down in the early hours of the day, but before noon it retraced to gap up. This was sustained till the end of the day’s trading to close higher, against the backdrop of the earnings reporting season already underway.
Traders and investors seeking to benefit from this season should be in position before the numbers start hitting the market.
For your game plan to profit from this earnings season already underway and subsequent ones, join us weekend at the coming workshop on comprehensive short term trading strategies for the that rest the year and beyond. There, you would learn how to grow your income with the earnings season.
The market uptrend on Monday was driven by positive sentiments for banking stocks, as better numbers are expected from the industry. It must be noted that the recovering economy and falling inflation rate have gradually improved their debt recovery which will impact positively on bottom line. Importantly, most of these debts have been fully provided for as none performing loans. In addition to the spread in exchange rate in the FX market that have been sustained by the CBN through regular interventions, just as the commission fee earned by the banks.
Oil price is moving up in the global market as the US$ continues to nosedive due to traders exiting their future position in the currency which has impacted crude oil prices, coupled with the OPEC cartel’s move to tighten its early deal on supply cut. Stock markets around the world closed higher as earnings season is underway.
Meanwhile, the composite NSE All-Share index gained 155.43 basis points up to close at 32,614.60 after opening at 32,459.17 points, representing a 0.50% growth on a low volume traded that was lower than previous day trades. Similarly, market capitalisation was up by N53.56bn to close at N11.24tr from an opening value of N11.19tr, representing a 0.48% appreciation in investors’ portfolios to kick start the week.
Value gained in the shares of Flour Mills, Access Bank, Zenith Bank, UBA, FBNH, FCMB, Guaranty Trust Bank and Oando that impacted positively on the All-Share index, boosting its year-to-date return to 21.38%. Also, market capitalisation over the same period improved by N1.99tr, representing a 21.56% 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 26:15 on a low volume of trade to continue the three-day bull transition.
Market activities in terms of volume and value were down by 14.27% and 18.06% respectively to 182.07m shares from the previous day’s 212.38m and N2.03bn from N2.47bn.
Transactions in the shares of GTBANK, FCMB, ZENITH BANK, DIAMOND BANK and FBNH topped the volume chart to close the day’s trade.
At the end of the day’s trading, Flour Mills Nigeria Plc topped the advancers’ log with its share price gaining 9.75% to close at N25 each, on market forces and N1 dividend ahead of Q1 numbers. It was followed by C & I Leasing with a 5% gain to close at N0.63 per share, on market forces.
On the flipside, UBN led the decliners’ log, after dropping 8.82% to close at N5.58 on profit taking by investors, followed by UPL and Skye Bank with 5% to close at N3.20 and N0.57 respectively on profit taking.
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. 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 cut 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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Countdown to COMPREHENSIVE SHORT-TERM TRADING STRATGIES FOR REST OF THE YEAR & BEYOND
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
3. A Strategic Outlook; The Fusion of Fundamental & Technical Analysis- Ambrose Omordion, Chief Research Officer Investdata Consulting Ltd
4. Understanding Market Timing to Manage Risk, Using Technical Analysis – Mr. Abdul-Rasheed Momoh, Head, Capital Markets, TRW Stockbrokers Limited
The workshop holds on:
DATE: 15 July 2017
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.
The fee is N20, 000 per participant. Payment made a week before the date of the event attracts 10% discount. Companies sending more than two representatives would enjoy a 15% discount. Payment should be made into: Zenith Bank; Account Name: InvestData Consulting Limited; Account Number: 1013033032.
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MR. OMORDION AMBROSE
CHIEF RESEARCH OFFICER
INVESTDATA CONSULTING LIMITED