Market Update for January 30
Trading on the Nigerian Stock Exchange at the midweek was a mixed session, extending its three consecutive days of bear-run as profit taking persisted. There was however a seeming reduction in the losing momentum on a low traded volume that reveals a slowdown in selling pressure, ahead of next the February 16 Presidential and National Assembly elections, even as investors continue to follow keenly the developments in the political space.
The NSE All Share index started out with a very brief pullback in the morning, but retraced up marginally by the midmorning to midday, but came down almost immediately on the back of very weak second and third quarter earnings reports released by Guinness Nigeria, Flour Mills and Honeywell (READ) respectively during trading. One common denominator in the score-cards was the decline in earnings power as reflected on their top and bottom lines attributed to weak demand and high cost of production.
The index pulled back in wedge to consolidate the previous day’s position after touching intraday low of 31,143.37 basis points from a high of 31,202.30bps, after which it rebounded slightly in the last few minutes of the day to close the session at 31,145.34bps in a 5-wave decline, the fifth wave being very strong, but was weakened by political risk selloff to end the day lower.
The increasing number of notification for board meeting dates to approve 2018 financial year scorecards should also guide dividend income investors on how to start positioning ahead of release date, because it is not all companies that need regulators’ approval before making their numbers available to investors. These notifications to the NSE and the quarterly results should give insight on which sector or industry you build tents now.
Wednesday’s market technicals were negative and mixed with the lower volume traded than previous session’s in the midst of a positive breadth and high selling pressure for stocks as revealed by Investdata’s Daily Sentiment Report, showing sell volume of 93% and 7% buy position. Volume index for day’ was 0.69.
The energy behind the day’s market performance was up despite the profit taking as reflected in 63.86bps money flow index, from previous day’s 62.07bps, an indication that funds are entering some stocks as the number of advancers were more than losers in the market for the day.

Index and Market Cap
The benchmark index at the end of the session shed a marginal 33.37bps, closing at 31,145,34bps after opening at 31,178.71bps, representing 0.11% decline; while market capitalization dropped by N12.45bn, closing at N11.61tr from the opening value of N11.63tr, representing a 0.11%value loss.
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The downturn was attributed to profit taking in banking stocks and selloffs in consumer goods like Flour Mills, Dangote Sugar, Nestle, Guaranty Trust Bank, Access Bank, Zenith Bank and FBNH, among others, pushing Year-to-Date loss to 0.91%. The loss in market capitalization increased to N106.46 billion, from the year’s opening level N11.72tr, representing a 0.91% decline.

Mixed Sectors Indices
The sectoral indices resisted further decline as all closed higher, except for the NSE consumer goods index that was hit with selloffs due to unimpressive quarterly results by companies in the sector previously mentioned. Market breadth turned positive with advancers outnumbering decliners in the ratio of 23:19. Market activities were mixed as volume traded was down by 30.58% to 249.54m shares from the previous 359.51m units, while value went up by 63.35% to N3.12bn from Tuesday’s N1.91bn. Transaction volume was driven by financial services stocks like: Zenith Bank, Access Bank, Sterling Bank, Diamond Bank and UBA.
Cornerstone Insurance and Mutual Benefits Assurance were the best performing stocks, gaining 10% each to close at N0.22 and N0.22 apiece on market forces. The flipside was led by Newest ASL and Lasaco Assurance, which lost 9.79%and 9.38% respectively each to close at N6.45 and N0.29 respectively, on the news of delisting and market forces.

Market Outlook
We expect the lingering profit taking and volatility to slowdown ahead of the outcome of National Judicial Council meeting, especially as companies like United Capital, Transcorp, Access Bank, UBA, Berger Paints and others have notified the exchange of their board of directors meeting to approve 2018 full year results. Despite the political tension that continues as the elections draw closer by the day, with market players taking advantage of cheap assets to position in value stocks ahead of 2019 dividend declaration season that will shape market performance after the elections. We advise cautious trading and investing why positioning in fundamentally sound equities.
Volatility will also persist as investors and fund managers reposition their portfolios, with eyes fixed on political space and ahead of full year company earnings position and post-election market dynamics. These are likely to drive prices north, or south, while determining market direction before or after the Presidential Election.
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

RE:PORT HARCOURT 2019
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
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Tel: 08028164085, 08032055467