Market Update for April 2

The Nigerian stock market on Tuesday had another volatile session, extending its negative outing which started in the second quarter, despite the relative good economic data and news of rising oil price. It does seem the market is yet reacting to the mixed corporate numbers released by listed companies.
The huge decline of the market in the first two trading days of April has become of serious concern to many investors. This is made worse by the absence, delay or failure by the government to roll out its economic policy or reforms plans to give a hint of what the next four years would look like. Already, there is enough discussion around the recent rate cut by the Central Bank of Nigeria (CBN), rising crude oil price and the Purchasing Managers’ Index for March increased from the 57.1 points reading in February to57.4 points, representing the 23rd consecutive month of manufacturing sector growth.
With Tuesday decline, there is an increasing low valuation of the market as Price to Earnings ratio touches its five-year low of 6.9x, meaning that there is an array of cheap stocks on the exchange for discerning investors to feast upon. These factors ought to have supported the market, but for the continued low confidence and liquidity.
Trading for the day started on a gap down into midday before retracing up by afternoon to touch intraday high of 30,712.37 basis points, from a low of 30,212.62bps. This reduced the losing momentum as the index finally closed the session at 30,226.77bps to consolidate previous day’s down market, which makes it the worst performance in the last one month.
Market technicalsfor Tuesday werenegative as volume traded lower than previous day’s in the midst of negative breadth and sentiments as revealed by Investdata’s Daily Sentiment Report, showing sell position of 97% and buy volume of 3% in total daily transaction volume index of 1.03.
Forces behind the day’s market performance were very weak and flat, as revealed by money flow index at 10.77 points, from previous day’s 10.75bps. This indicates that funds are not entering the market, despite hopes that the rate cut should attract funds to the market.

Index and Market Cap
The benchmark NSE All-Share index (NSEASI) on Tuesday shed 300.73 basis points to close at 30,226.77bps, from 30,531.69bps, representing a 0.99% decline. Market capitalization lost N169.01bn, closing at N11.35tr, from its opening value of N11.52tr, representing 1.47% value loss. This variance in NSE Index and market capitalistionwas due operational error as Access Bank scheme shares did not reflect during the day trading session, which exchange had acknowledged.
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The session downturn was caused by sell-offs in consumer goods, banking and petroleum marketing stocks: Nestle, Nigerian Breweries, Beta Glass, Unilever, Zenith Bank, UBA, UACN, FBNH, Oando, Dangote Flour, Flour Mills, and Transcorp. This impacted on Year-to-Date loss, extending it to 3.83%, while market capitalization dropped by N308.30, or 2.10%, from the year’s opening level of N11.72tr.

Mixed Sector Indices
The sectoral performance indexes were largely bearish, except for the NSE Insurance and Industrial Goods that were up by 0.93% and 0.14% respectively, while market breadth was negative as decliners outnumbered advancers in the ratio of 28:10.
Market activities were mixed as volume was down by 78.14% to 376.95m shares, from previous day’s 1.72bn units, while value rose by 23.32% to N4.54bn, from N3.68bn on Monday. This volume was driven by financial services stocks like: FCMB, Sterling Bank, UBA, Fidelity Bank and Zenith Bank.
The best performing stocks for the session were Wema Bank and Sovereign Trust Insurance, gaining 10% each to close at N0.77 and N0.22 per share on the strength of the 3 kobo dividend payout and market forces. On the other hand, Beta Glass and Forte Oil lost 9.95% and 9.9% respectively, closing at N58.35 and N24.85 each,as the marketreacted to the low payout of the former and the latter’s failure to propose a dividend for 2018.

Market Outlook
We expect a mixed market performance to continue as players reposition for Q1, which will help give direction into how this year could turn out after seeing the 2018 financials. We note also that there are more company’s notifying the NSE of their closed period for first quarter 2019 earnings reports.
Investors look to government’s policy direction as the market faces low liquidity problems in the ongoing earnings reporting season, vis-à-vis market and economic fundamentals.
Given the drop in the prices of major blue chips in recent times, creating entry opportunities, we expect speculative trading to shape the market direction going forward.
The volatility witnessed last week, was driven by traders and investors repositioning ahead of dividend declaration by major listed companies.
The ongoing volatility will continued as investors and fund managers rebalance their portfolios, with eyes fixed on political space and ongoing full year company earnings position and post-election market dynamics. Investors should review their positions in line with their investment goals, strength of the company numbers and act as events unfold in the global and domestic environment.
However, we would like to reiterate our advice that investors should go for equities with intrinsic value,
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals.
Meanwhile, we greatly appreciate participants in the Abuja Invest 2019 Post-Election Bulls & Bears held on Saturday, March 23.
The investment education train moves to Port Harcourt, Rivers State, with Chart Summit 2019!
Attend the Practical Conference on Technical Analysis Application on stock market for novices and Advance Traders, where we would take participants through:
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• Know what Smart Money is doing
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The workshop is scheduled as follows:
FEE: N10, 000
DATE: April 13. 2019
TIME: 10am – 4.00pm
VENUE:Emerald Hotel, 193, Aba Road Rumuola, Port Harcourt, Rivers State.
This Summit is designed specifically for those who:
• Jump off profit position out of fear
• Suffer indecision in pulling the trigger for fear of sustaining a loss
• Holding on to losing positionsfor fear of realizing a potential loss
• Trading often leads into unplanned trades for fear leaving money on the table
• Do small trade size or invest small amounts because you’ve just suffered huge loss, or
• Plan to increase your position size to make up for past losses
This practical workshop is for novice traders, investors, professionals and fund managers who want to overcome fear and improve their trading performance. The workshop is basically on practical charting on evidence-based techniques that is working in today market, just as the power of focused trading and investing strategies to help participants build mental skills and turn fear into profits, besides protecting capital.
Registration is ongoing
Prepare yourself to profit from the market, as the economy recovers in the months ahead, while truly achieving financial independence and freedom in 2019 and beyond. There will be Home Study Packs you can play and view on your phone, laptop and television sets that will teach, among others: Stock trading/investing, Fundamental/Technical Analysis on sale at the venue. All at 20% discount for participants.
Also, Come With Your Laptop for the practical sessions.

TAKE ACTION
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467