Market Update Feb 16
After Thursday’s trading one of the early filers United Capital released its full-year earnings report in keeping with its post-listing requirement on the floor Nigerian Stock Exchange., becoming the first December 2016 year-end account to declare mouthwatering dividend for its shareholders on the strength of impressive numbers that beat market and analysts’ expectations.
The performance was evidently a demonstration of management’s commitment to create value for its investors. Also, an investment yield of 13.55% in less than two weeks is attractive enough for any class of investor that knows the importance of timing in investment.
Even as investor confidence in the economy and government’s economic management team continues to dwindle, impressive numbers from the financial and services sector may support the reversal of this bearish trend in the market, if all expected economic recovery plan of the government is made available, followed by action to actualized the set goals and results as spelt out in that plan.
Meanwhile, the composite NSE All-Share Index shed 74.97 points to close at 25,055.29 points on Thursday, from an opening figure of 25,130.26 points, representing a 0.30% decline on low volume of trades. The bearish sentiment during trading was as a result of investors apathy to investing in a glooming economy where consumer confidence is falling and macro-economic fundamentals are negative and daily getting worse due to lack of political will and strategic plans to revamp the economy again.

Trading on the exchange reversed the previous day’s bull position as buying volume was 10% and selling volume of 90%, to close the day, just as market capitalisation was down to close at N8.67 trillion from its opening value of N8.70 trillion, representing 0.30 percent loss in value.

The value loss pushed the NSE All-Share index year-to-date negative position further to 6.84%, due to price depreciation of NB, Zenith Bank, Stanbic IBTC, UACN and FO. Market capitalisation for the same period adjusted downward to stand at N575.76 billion representing 6.23% for the same period.
Market breadth was flat and weak as the number of decliners outpaced advancers in the ratio of 17:17 on a down market.
The day’s traded volume and value were down by 12.68% and 14.44% respectively to 141.40 million shares worth N1.54 billion as against the previous 161.90 million shares valued at N1.80 billion.
Transactions in financial service stocks: UBA, Guaranty Trust Bank, FCMB, Zenith Bank and United Capital dominated the activity chart as most traded equities by volume.
The NSE All-Share Index and all sectoral indices were mixed in performance even as the NSE Banking, NSE Premium, NSE Pension, NSE Oil/Gas, NSE Industrial Goods were in green, while NSE AseM closed flat.
At the end of the day, Julius Berger topped the advancers table with 5% to close at N36.57; followed by Neimeth with 4.55% to close at N0.69. On the decliners table, UACN led by 4.97% to close at N14.85, next on the table was Vitafoam, losing 4.81% to close at N1.98 per share.

DAILY TIME FRAME NSEASI

The index on daily time frame is struggling within descending triangle chart pattern and falling channel to break down or retraced at this double bottom level. At the same time, index movement refused to breakdown the 25,000 psychological lines, despite the bearish sentiment. The low volume traded also signals accumulation by smart money, especially as the market remains in its oversold region, a signal that supports bottoming out.
Market sentiments of service companies, especially banking, few insurance, agribusiness and petroleum remain positive amidst expectations that they may support reversal of the market in the short term. UCap, being the first to hit the market with its audited result must have strengthened this confidence.
The trending ability of the market on a daily time frame is strong, as ADX is above 20 at 29.04
As you watch the market to reverse, position in value stocks that are likely to pay dividend as the first dividend announced is having a yield of 13.55% which is good considering the short time of two weeks for such returns.

Look the way of these stocks to average down or buy for medium term.

Ucap. Aiico, Zenith, UBA, Total, Presco and Eterna