Market Update for May 3
The bull transition on the nation’s stock market continued on Wednesday as the benchmark index crossed the 26,000 psychological line to confirm a new uptrend on above-average trading volume in the market, reflecting high demand for stocks as traders and discerning investors take advantage of the recent numbers to reposition their portfolio.
Mid-week’s trading volume index was at 1.05, while buying position was 97% and selling volume, 3% of the day’s total, to continue the bull sentiment, as the market reacted positively to improving company earnings, positive economic data and recovery move in the nation economy.
Yes, other technical indicators are looking up to support the bull rally, but the Bollinger band is signaling an imminent pullback, especially considering the fact that the index action has hit the upper band.
Investors’ eyes are on the economic data and banking stocks remain a point of attraction on the strength of their impressive Q1 scorecards and the important role they play in economic growth and development, especially now that the business environment seems to be improving.
Stock markets around the world were mixed to close higher on the strength of international interest rate remaining unchanged at the end of the Fed’s monetary policy meeting, complemented by the superlative corporate earnings that beat expectations and supported stock prices. Already, the Fed’s statement triggered Asian stocks and the U.S Dollar again. In China, Purchasing Managers’ Index (PMI) for the month of April slowed down to reflect weak manufacturing activities for the period.
Meanwhile, back home, the composite Nigerian Stock Exchange (NSE) All-Share index gained 151.61 basis points to close mid-week’s trading session at 26,116.79 points, from an opening figure of 25,965.18 points, representing a 0.58% growth on a high volume traded, when compared to previous day’s volume. Similarly, market capitalisation for the day went up by N52.41bn, closing at N9.03tr from an opening value of N8.97tr, representing a 0.58% value gained by investors.
The upturn in the shares of Nigerian Breweries, Zenith Bank, Stanbic IBTC, Ecobank Transnational Incorporated, Access Bank, FBN Holdings, Oando, Unilever and Forte Oil impacted the All Share index to reduce year- to-date negative position to 2.82%, while market capitalisation adjusted down to N219.62bn loss, representing 2.38% loss YTD, from the year’s opening value.
Market breadth for the day remained positive and strong as the number of advancers outpaced decliners in the ratio of 27:13 to continue it four days bull streak
Market activity in volume and value were up by 38.46% and 35.99% respectively to 264.49m shares from previous day’s 191.02m shares, valued N2.9bn from previous day’s N2.13bn. Transactions in the shares of ZENITHBANK, GUARANTY, UBA, TRANSCORP and FBNH topped the activity chart as most traded equities by volume
The NSE All-Share index and all sectoral indices were in the green to close the day’s trading activity.
During the day’s trading, Newrest ASL (formerly Airline Services Limited) released it full year earnings report with the directors proposing a dividend of 17.7 kobo per share. Others like Mulitverse, Interlinked released their quarterly reports.
At the end of the day, Fidson Healthcare topped the advancers log, as its share price gained 10.00% to close at N1.32, on market forces; followed by Oando with 7.92% to close at N6.54 on the back of the interplay of market forces. On the flipside, Unity Bank led the decliners log, shedding 6.90% to close at N0.54 purely on market forces as investors continue to react to the twin 2016 full year and 2017 first quarter report; followed by carbonated soft drinks maker 7-Up, which dropped 5.00% to close at N90.25 also on market forces.
As market opens this morning, expect mixed performance as profit booking is underway. That means investors should not panic if they take position based on strong numbers and future prospects of any stock. We advise that investors allow numbers to guide their decisions to reposition for the rest of the year’s trading especially now that first quarter earnings reports are out to give insight what should be expected at the year end.
Industry potential is very important when picking a particular company, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry.
Technically, the market’s uptrend continued on a high volume that supported positive market breadth on a strong demand of stocks due to impressive Q1 financials.
Nonetheless, the NSE’s trending ability and direction is still weak as ADX is below 20 at 14.57, while MFI is looking up to indicate money is entering the market as at close of trade. MACD is still bullish while RSI is reading 63.34 which is relatively at the overbought region as at yesterday close.
Always combine your technical with fundamental to position at any stock.

NSEASI ON DAILY TIME FRAME

The market recovery is always on oscillating move as profit taking in interval pulls back the trend.