NGSE: Mixed Session Ahead, As Traders, Fund Managers Position For Q3-end Window Dressing

Market Update for September 26
Thursday’s was yet another volatile session on the Nigerian Stock Exchange (NSE), as the market halted previous days’ decline, holding support on a warm rebound, following which the All-Share Index resisted further slide on improved buying interests that lifted prices. The lift was, however, not enough to wipe out loses recorded in the first three trading sessions amidst strong selloffs.
This, nonetheless, is a mildly bullish signal, since bellwether and blue-chip stocks revealed the fact that more investors are showing interest.
Should market players maintain this tempo in the days to come, Thursday is a sign of the beginning of the next upward market move, especially if sustained today and Monday- the last trading session of September.
The momentum behind the day’s performance remained relatively strong and elevated and trading activities on Friday and Monday could see significant moves as fund managers balance their portfolios in preparation for the last quarter of 2019. This two-day trading may actually provide a signal for how players are likely to position in the months ahead, with Q3 earnings reporting season is around the corner.
It is also worthy of note that implementation of the 2019 capital budget has kicked off with the recent approval of funds by the Federal Executive Council for road construction and infrastructure development in the nation’s universities. Also, all eyes are on the new economic advisory team to provide a workable roadmap to stimulate consumption and production capacity to drive growth and development.
Meanwhile, Thursday’s trading started on a slight upside in the early morning and waxed stronger between the mid-morning and afternoon on increased buying interests in high cap stocks. The index touched intraday high of 27,579.85 basis points, from a low of 27,281.38bps, closing the day higher at 27,579.85bps on a low traded volume.
Thursday’s market technicals were positive and mixed with volume traded lower than previous day’s in the midst of positive market breadth and sentiments, as revealed by Investdata’s Daily Sentiment Report, which showed ‘buy’ volume of 100%, while ‘sell’ position stood at 0% on total daily transaction volume index of 0.81.
The energy behind the day’s performance was strengthened as Money Flow Index read 56.09 points, from the previous session’s 48.73bps, indicating that funds entered some stocks and the market as portfolio managers and traders apparently continued taking a position for the end-of-quarter window dressing. This, however, indicates that discerning traders and investors need to hold position and watch.

Index and Market Cap
NSE All-Share Index at the end of Thursday’s session gained 296.80bps at 27,579.85bps, from its 27,283.05bps opening level, which represented a 1.09% rise; just as market capitalization rose by N144.48bn to N13.48tr, from an opening value of N13.28tr, which also represented a 1.09% appreciation in value. The daily time frame MACD and Money flow index closed up, strengthening their bullish trends.
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The day’s upturn resulted from market players positioning for end of the quarter in stocks like Nestle, Seplat, Total Nigeria, Zenith Bank, Access Bank, UBA, FBNH, and Dangote Sugar, among others. This impacted positively on the NSE’s Year-to-Date loss, which reduced to 12.25%, while YTD market capitalization gain climbed to N1.8tr, representing 14.45% improvement over the year’s opening level of N11.72tr.

Bullish Sector Indices
All the sectoral performance indexes closed in the green, led by the NSE Oil/Gas index which gained 5.70%; followed by Consumer Goods index with 4.85%; while NSE Insurance, Banking, and Industrial Goods indexes grabbed 3.58%, 0.51% and 0.02% respectively.
Market breadth turned positive as advancers outnumbered decliners in the ratio of 16:7; while market activities in volume and value fell by 60.32% and 63.01% respectively to 183.47m shares worth N2.93bn; from previous day’s 462.32m units valued at N7.92bn. Volume was driven by transactions in Access Bank, Guaranty Trust Bank, Trancorp, Lafarge Africa and FBN Holdings.
Total Nigeria and Nestle were the best-performing stocks for the day, after gaining 10% each, closing at N110 and N1336.50 each, on low price attraction and market forces. On the flip side, Forte Oil and Honey well lost 6.78% and 5.94% respectively, closing at N15.80 and N0.95 on selloffs.

Market Outlook
Being the last trading day of this week, expect a slowdown of Thursday’s trend due to profit-taking, as fund managers position ahead of the quarter-end, while bargain hunters take advantage of low stock prices to position, now that the NSE index has resisted further decline. Discerning investors should latch on it to average down and recoup their investment immediately a recovery stage is set through economic policies and things start to change gradually to influence equity prices positively, while investors watch these sectors that have become defensive recently like insurance, banking, industrial goods, services, and oil/gas that will go bullish in no distance time. Also, with all eye fixed on the newly appointed economic advisory council to settle down and kickoff.

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