Market Update for November 24
Trading activities on the Nigerian Stock Exchange rebounded on Tuesday on the back of the Central Bank of Nigeria’s Monetary Policy Committee decision to retain all policy instruments unchanged, so as to drive economic output and hasten recovery. The rebound halted three consecutive sessions of losses on high buying pressure that resurfaced by early afternoon.
The rebound also came as the outgoing President of the United States, Donald Trump, finally conceded defeat, after weeks of stand-off, to give way for the transition activities of President-elect Joe Biden.
The MPC members ended their two-day meeting on Tuesday with a unanimous decision to retain all rates, restoring confidence to the stock market, and contributing largely to the recovery witnessed during Tuesday’s session.
In our opinion, the just released nine months financials of companies with December year-ends, should be the major investment guide at the moment, even as we also believe that movements in economic indicators/policies will sharply dictate market direction going forward. This is given the fact that the nine-month earnings season has ended, while the next major earnings season begins at the end of first quarter 2021, when companies begin to file their audited numbers for December 31 year-ends. We advise players to position right by combining fundamental, technical and sentiments while making their choices.
How to shop for stocks in this market in recovery will be discussed at our Invest 2021 Summit on December 5, for Traders & Investors, tagged: New Opportunities and new paths to profit.
Tuesday’s trading started on a slight upside in the morning and was sustained throughout the session amidst buying interests across various sectors that lifted the NSE All-Share index to an intraday high of 34,343.56 basis points, from its lows of 34,095.69bps. Thereafter, it closed the session higher than the opening value at 34,340.56bps on a low traded volume.
The session’s market technicals were positive and mixed, with lower volume traded than previous day’s in the midst of breadth favouring bulls on a high buying pressure, as revealed by Investdata’s Sentiment Report showing 99% ‘buy’ volume and 1% sell position. Total transaction volume index stood at 0.73 points, just as impetus behind the day’s performance was relatively strong, as Money Flow Index read 72.28 from the previous day’s 72.08 points, an indication that funds entered some stocks and the market, halting profit taking.
Index and Market Caps
The key performance index of the NSE rebounded at the end Tuesday’s trading, after the news confirming the recession triggered panic selloff on Monday, with th NSEASI gaining 218.78bps. It closed at 34,340.56bps, representing a 0.65% rebound, after opening at 34,121.78bps, just as market capitalization retrieved N113.38bn at N17.94t, after opening at N17.84tr, also representing a 0.64% value appreciation.
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Tuesday’s upturn was driven by price appreciations in medium and large cap stocks like Guaranty Trust Bank, Stanbic IBTC, United Capital, UBA, Access Bank, FCMB, FBNH, Dangote Sugar and Fidelity Bank, among others. This impacted positively on the Year-To-Date gain, as it increased to 27.94%, while market capitalization YTD returns stood at N4.98tr, representing a 38.47% growth above the year’s opening value.
Bullish Sector Indices
Performance indexes across the sectors were bullish, led by the NSE Banking that closed 2.18% higher, followed by the NSE Insurance which notched 2.02%; while the Consumer, Industrial Goods and Oil/Gas index were up by 1.36%, 0.06% and 0.03%.
Market breadth turned positive as advancers outnumbered decliners in the ratio of 26:16, while activity in volume and value terms dropped, with 365.41m shares traded at N4.69bn, compared to previous day’s 568.04m units worth N7.33bn. Volume was driven by trades in Zenith Bank, Transcorp, Guaranty Trust Bank, Access Bank and UBA.
United Capital Plc and Fidelity Bank were the best performing stocks, gaining 9.52% and 9.47% respectively to close at N4.60 and N2.66 per share on the back of market forces reactions to their impressive earnings. On the flip side, Eterna and Fidson Healthcare lost 9.98% and 9.81% respectively, at N4.15 and N4.87 per share, on profit taking.
We expect a mixed trend, as players reshuffle their portfolios ahead of year end seasonality trends, as investors plan to make the best of the zero change in monetary policy tools, amidst the wait to see the further impact of recently deployed fiscal and monetary tools on the economy. This will continue to drive funds into Nigeria’s equity space as investors react to banks’ earnings which came mixed in the midst of recession news and the rise in November PMI to 50.2 points, from 49.6 points in October after six months of contraction according to the CBN. The NSE Index and Fibonacci revealed a ceiling of 35,814.18bps and 161.8%, that must be broken for current recovery moves to continue.
However, strong and faster recovery may continue, depending on market forces going forward. This will depend on how investor see the quality of Q3 score-cards presented, especially by the tier-1 banks, even as analyses of numbers released so far have helped repositioning of investors’ portfolios on the strength of sector and company’s performances.
The NSE’s index action and indicators are in divergent direction on a low traded volume and mixed sentiments.
Again, the current oscillating state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation in the rest of the year.
Meanwhile, the home study packs on Strategies and How to invest profitably in this Changing Market Dynamics/ Recession, Mastering Earnings Season For Profitable Investing and Trading in any market situation/ cycles, Life Beyond COVID 19 Investment Opportunities In The Stock Market are now available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08032055467, 08111811223 now.
INVEST 2021: New Opportunities and New Paths To Profit Summit
- 2020 Review & 2021 Stock Market Ride: Where to Shop for Profit in Any Market Condition (AlhajiGarbaKurfi MD/CEO APT Securities & Funds Ltd)
- Volatility: How to use Resistance and Support for Profitable Trading in 2021 and beyond (Mr Abdul-Rasheed Momoh Head Capital Market Trw Stockbrokers Ltd)
- 2021 Budget and Oscillating Crude Oil Prices: Implication for the Nigerian Economy and Stock Market (MrAbiolaRasaq, CSCS)
- Changing Investment Climate and Monetary Policy: How to take position (MrJibril Muhammed Bello, Head Capital Market Newdevco Invest/Securities)
- Effect Of The CBN Monetary Easing Policy On The Stock Market In 2021 (Engr. Mike Ekwueme MD, X-Front Trader Ltd
- Investment Strategies for Assets and Portfolio Realignment in 2021 & Beyond (MrAdeboyeTeriba, Head, Trading NovaMBL Securities Ltd
- Dividend Investing For Juicy Returns In Post COVID-19 And Low Yields Regime. (Mr. Ambrose Omordion CRO Investdata Consulting Ltd)
At this summit, you will meet and listen to Nigeria’s Top Traders and investment experts share their knowledge and expertise. Our goal is to arm you with information and tools needed to make money and become a successful investor.
- The power of insider perspectives in stock trading and investing
- The high returns and risks in a recovery market
- How to invest in a low interest and yield environment
- What you must know about the prevailing market and economic situation
- Alternative Asset Classes to diversify your portfolio
- What to do when rates crash further, going forward
- How to ride on dividend payout in a post-COVID recovery move
- 10 Golden Stocks to buy immediately after the summit
Date: December 5, 2020
Time: 10am prompt
However, with less than 63 days to the New Year 2021, you need to start planning your success in 2021.
During this practical summit our team of experts will reveal practical trade ideas and opportunities in 2021 to consolidate your gains and maximize returns. That is what you can apply or implement immediately and start tracking the result by yourself.
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Tel: 08028164085, 08032055467