Market Update for June 6, 2018
Nigeria’s equity market had another solid trading session at the midweek to consolidate the third consecutive daily gain in the recovery move which has been strengthened by increasing demand for stocks by bargain hunters as positive market breadth widen.
It can be deduced from the market market’s latest behaviour that it is establishing a new trending pattern from this recovery move after protracted correction which would make equity trading interesting, going into the second half of the year. This is especially for traders and investors that understand the power of combining technical and fundamental tools while reading the market for profitable trading and investing. Among others, the investdata comprehensive training materials on stock Trading and Investing for Financial Independence series provide this knowledge. You can play and watch on your mobile phone and laptop by downloading live classes that will boost your knowledge of wealth creation through the Nigerian stock market.
Wednesday’s trading session opened with a little gap up which was sustain up till the mid-morning and afternoon when the benchmark NSE All-Share index touched intraday highs of 38,463.54 basis point, from its low of 37,854.92 to extend the motive Wave 3 established at the beginning of this reversal, despite the slowdown in the day gaining momentum.
Market technicals for the day were positive and strong as traded volume increased in the midst of improved demand for stocks and positive market breadth. Investdata daily sentiment reports revealed players buying pressure of 95% and selling sentiment of 5% on a volume index of 1.22 of the day’s total transactions.
The energy behind the buying sentiment for the session was reflected on the money flow index at 15.01 points from the previous day’s 12.92 points, which is an indication that funds are still entering the market as at Wednesday. Meanwhile, investors and traders patronage for medium and high cap stocks remains high.
Index and Market Cap
At the end of midweek’s session, the composite NSEASI maintained a bull run by gaining 580.37bps to close at 38,435.29 bps, after opening at 37,854.92bps, representing a 1.53% growth on a high volume that was higher than the previous day’s.
Similarly, market capitalisation rose by N210.22bn to close at N13.92tr from an opening value of N13.71tr, also representing 1.53% value gain that further reduced loss position in investor’s portfolio Year-to-date. The market is up-trending towards a breakout of the 38,000 psychological line to confirm that it has bottomed out and is now consolidating the recovery move.
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The sustained upturn on Wednesday was due to value gain in highly capitalised stocks like Dangote Cement, NB, Guinness, Unilever, Flourmills, Zenith Bank, Fidelity Bank, Dangote Flour, Oando, Dangote Sugar and Forte Oil, which impacted positively on the market and turn NSE’s Year-to-Date gain of 0.50% again; while market capitalisation gain for the period stood at N312.93, of 2.30% above the year’s opening value.
Bullish Sector Performance
Sectorial performance across broad were bullish as all sector indexes were in green to confirm wide spread recovery as many equities retrace up in the same direction with the general market. The NSE Industrial Goods index led after gaining 4.2% due to gains recorded by Dangote Cement and Lafarge Africa, followed by the NSE Banking index, resulting from price appreciation by Zenith Bank, FCMB and Fidelity Bank. Others sectorial indices closed higher on strength of gains by NB, Dangote Flour, Unilever, Guinness, Forte Oil, Oando, Continental Reinsurance and Aiico Insurance.
Market breadth was positive with increasing number of advancers that outpaced decliners in the ratio of 41:16 to continue third day of bull transition.
Market activities were up in volume and value by 15.7% and 11.9% respectively to 393.12m shares worth N6.67bn from the previous day’s 339.68m units valued at N5.96bn, just as transaction volume was boosted by trading in financial services stocks like Zenith Bank, Fidelity Bank UBA, Access Bank and Diamond Bank which witnessed increased trading to top the activity chart.
Fidelity Bank and Oando were the best performing stocks to top the advancers’ table, gaining 9.91% and 9.70% respectively to close at N2.33 and N7.35 each. This was as a result of low valuation attraction and improving earnings.
On the flip side, Guinea Insurance and Mutual Benefits Assurance were the worst performing, losing 5% each to close at N0.38 and N0.40 respectively on market forces and profit booking.
Market Outlook
We expect the trend to slow down as it tries to breakout the Fibonacci dotted line of 23.6% and lower line of the bearish channel due to likely profit booking by traders from the three-day rally. Volatility may continue as investors and other players rebalance their portfolios ahead of March full-year accounts, especially as equities remain undervalued with higher yields. Investors should review their position in line with their investment goals and take action as events as it unfolds in the global and domestic environment.
However, we would like to reiterate that investors should not panic but go for equities with intrinsic value, especially during this season were less earnings are released ahead of march full year earnings release and Q2 interim dividend payment are expected in the market arena very soon.
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. A stock market is in cycles. You must know the cycle it, or particular stocks therein are to successfully manage your trading and investment risk. For stocks that should be on your shopping list to buy in these seasonal changes as the year unfolds, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack of the INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy, thereby ensuring that you invest and trade with knowledge. You can also access stocks analysed in the home study pack of the Chart Summit held on February 24, 2018, including the 15 stock-picks for 2018 are available now to guide your positioning as trading for the year.
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and TV set. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.
Ambrose Omordion
CRO|Investdata Consulting Ltd
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Tel: 08028164085, 08032055467
