Market Update for December 4
The nation’s stock market at midweek continued its decline but at a slower pace, while mixed sentiments continued to prevail as market players traded cautiously, despite the rates and yields’ crash across other investment windows, as well as the expected seasonal market moves this December.
The declining transaction volume signals the wait-and-see attitude of smart traders using this opportunity to accumulate some stocks ahead of the seasonal rally associated with year-end.
Indeed, the market is still out of its bearish zone despite the three sessions of profit booking and the trading volume pattern displayed so far. The NSE Index’s movement pattern since the introduction of the new pricing methodology by the management of the Nigerian Stock Exchange differs from some sectorial indexes and individual stocks. The price movement of some stocks that are creating wealth for traders may not, as such, reflect on the index due to the insignificant impact of these equities, as a result, their low prices. The price movement of blue-chip and dividend-paying stocks is a function of the level of liquidity available to the market, while a small amount of money can move the kobo stocks.
Wednesday’s trading opened on the downside, wobbling between the mid-morning and afternoon on buying interests sell down in others, which dragged the benchmark index to an intraday low of 26,918.12 basis points, from its high of 26,956.43bps. Thereafter, it rebounded slightly to close the day lower at 26,934.58bps on positive market breadth.
Market technicals for the session were weak and mixed as volume traded came lower than the previous day, with breadth favouring the bull, just as there were mixed sentiments predominantly as revealed by Investdata’s sentiment report of a 53% ‘buy’ volume and 47% sell position. The day’s total transaction volume index stood at 0.36, with a slowdown in the momentum behind the day’s performance as Money Flow Index read 57.52 points, from the previous 62.77bps. This is an indication that funds left some stocks and the market, despite the low traded volume.
Index and Market Caps
The All-Share Index, at the close of midweek trading, shed a marginal 5.74bps, closing at 26,938.58bps from its 26,944.32bps opening, representing a 0.02% drop, just as market capitalization lost N2.78bn at N13tr, from the opening value, which also represented a 0.02% value loss.
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Midweek’s downturn was driven by market forces and profit-taking in stocks like Guaranty Trust Bank, Zenith Bank, Okomu Oil, UBA, Wema Bank, FCMB, Honeywell, Oando and Transcop, which impacted mildly on the NSE’s Year-to-Date loss, increasing it to 14.29%. Market capitalization gain for the period dropped to N1.21tr, representing a 10.93% growth from the year’s opening value of N11.72tr.
Mixed Sector Indices
The sectoral performance indices were largely bullish, except for the NSE Banking and Oil/Gas indexes that closed 0.45% and 0.24% lower respectively, while NSE Insurance led the advancers after gaining 0.77%. It was followed by Industrial and Consumer Goods indexes, which were up by 0.34% and 0.15% each.
Market breadth turned positive as advancers outnumbered decliners in the ratio of 16:13, while market activities dropped in volume and value by 40.27% and 62.64% respectively to 112.89m shares worth N1.08bn from the previous day’s 189.01m units valued at N2.88bn. This volume was boosted by transactions in Zenith Bank, FCMB, UBA, Fidelity Bank and Guaranty Trust Bank.
Japaul Oil and May & Baker were the best-performing stocks for the day as they topped the advancers table, chalking 10% and 9.74% respectively to close at N0.22 and N2.14 each respectively, on the back of market forces. On the flip side, Sterling Bank and Chams lost 6.34% and 5.72% respectively, closing at N1.92 and N0.33 on profit-taking and market forces
Market Outlook
We expect this mixed performance to continue at these early days of December, given the profit-taking and level of indecision among market players ahead of the usual Santa Claus and year-end rally as capital flow and repositioning in value stocks will persist. There is also the changing sentiment in the expectation of improved liquidity and positive economic indices. At the maturity of OMO investment, more funds will be available as CBN has restricted players to foreign investors and the local banks.
Again, the current undervalued state of the market offers investors opportunities to position for short and medium-to-long-term views. We expect that investors would target fundamentally sound and dividend-paying stocks for possible capital appreciation as the year draws down to usher in 2020.
Also, traders and investors need to change their trading strategies due to NSE’s pricing methodology, CBN directives and its impact on the economy in the nearest future.
Take Action
INVEST 2020: Opportunities and Trade Ideas Summit Holds this Saturday!
Sub-Topics
- Recession or Boom: Five Trading Strategies for Picking Best Stocks in Good Times or Bad-Alhaji Garba Kurfi, Managing Director of APT Securities & Funds Limited.
- 2020 Global/Nigeria Macro-Economic Outlook & Sectors To Position, Rasaq Abiola, Head, Corporate Strategy CSCS Plc
- Critical Chart Patterns For Pinpointing Stocks That Could Explode Higher In 2020- Abdul-Rasheed OshomaMomoh, Head, Capital Market, TRW Stockbrokers Limited,
- Keys To Identify Opportunities In Stocks, Exchange Traded Fund (ETF) Fixed Income and Commodities Markets In Any Market Environment.- Ekwueme Mike Anyadibe, Head, Fixed Income Sales at TRW Stockbrokers Limited.
- Mastering Earnings & Dividend Game Plan For 2020 Investing Opportunity & Beyond– Ambrose Omodion, Chief Research Officer, InvestData Consulting Limited,
Over the years, we have received requests from our followers, concerning our annual Traders & Investors Summit scheduled for December, where experts and analysts would x-ray investment and trading opportunities in the New Year.
At the forthcoming summit, participants would
- Learn from some of the best professionals in the market
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- Offer opportunities to network with peer value investors and investment professionals who share your passion for investing
- Understand more about using Investdata Buy & Sell Signal setup strategies and research tools to improve outcomes
Expected Takeaways
- Pinpointing chart patterns for Profitable Trades and investing opportunities in an uncertain market environment
- Investment analysis and theses behind these ideas
- Special Earnings and Dividend Game Plan for 2020 investment opportunities
- Understanding the changing economy and trend for profitable investment
- How successful value fund managers research into and evaluate companies
- Exclusive insight and actionable value strategies from world-class professional Traders
- Over 10 Trading and investing tips for identifying undervalued Stocks you can buy now
Date: December 7, 2019
Fee: N25,000
Venue: Ostra Hall & Hotels Ltd, Off OtunbaJobifele Way, Opposite NNPC Gas Plant C.B.D, Alausa, Ikeja Lagos, Nigeria.
However, with less than 60 days into the year 2020, you need to start planning now because it is either you plan to succeed in 2020 or you don’t decide. Instead, you fold your hands means you are planning to fail. So, this practical summit is first of its kind because a team of experts will reveal pure practical trade ideas and opportunities in 2020 that will help participants recoup losses and maximize returns no theory. That is, what you can apply or implement immediately and start tracking the result by yourself.
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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
