Market Update for July 6

Nigeria equity market on Thursday had a very interesting session, even as the volatility witnessed over the past days continued. It gapped down in the early hours of the day’s trading only to rebound at mid-day, closing higher on positive sentiments that reflected on improved demand for stocks after four straight days of pullbacks as a result of profit booking and expectations for Q2 numbers of quoted companies by investors.
The day’s trading volume index stood at 0.36 on a buying position of 100%, while selling volume was 0% of the total volume traded. We can see that the market is resisting breakdown at the support level of 32,000. However, the decline in volume at this point makes the whole things unclear, but then, let see what happens on Friday, being last trading day of the week.
The market uptrend reversal on Thursday was driven by positive sentiments for banking stocks, especially the interim dividend paying ones in expectation of better numbers as second quarter earnings reporting season had gradually kicked off. There is also positive sentiment for petroleum stocks and building material making companies from which positive numbers are expected based on the Q1 numbers posted already by players in both sector on the strength of recovery and improving economic fundamentals.
Meanwhile, the composite NSE All-Share index crawled 52.46 basis points up to close at 32,354.78 after opening at 32,302.32 points, representing a 0.16% growth on a low volume traded that was lower than previous day trade’s. Similarly, market capitalisation limped N18.08bn up to close at N11.15tr from an opening value of N11.13tr, representing 0.16 % value gained in investors’ portfolios after four day of losses.
Price appreciation of high cap stocks like Dangote Cement, Zenith Bank, UBA, Seplat, ETI, Access Bank, 7-Up, Oando, FBNH and Guaranty Trust Bank impacted positively on the All-Share index, boosting its year-to-date return to 20.20%, just as market capitalisation over the same period improved by N1.89tr, representing a 20.40% gain above the year’s opening value.
Market breadth for the day was negative as number of decliners outpaced advancers in the ratio of 23:20 on a low volume of trade to halt four day bearish run.
Market activities in terms of volume and value were mixed as volume went down by 45.88% to 168.51m shares from previous day’s 311.38m and value was up by 21.93% to N3.63bn compared to the previous day’s N2.79 billion.
Transactions in the shares of GTBANK, FBNH, ZENITH BANK, TRANSCORP and LIVESTOCK FEEDS topped the volume chart to close the day’s trade.
At the end of the day’s trading, Oando topped the advancers’ log with its share price gaining 4.97% to close at N7.39 each, on market forces; followed by AXA Mansard with 4.91% gain to close at N2.35 per share, on a strong Q2 earnings expectations.
On the flipside, May & Baker led the decliners’ log, after dropping 9.40% to close at N3.18 on profit taking by investors, followed by UACN’s 4.95 % to close at N16.50 each also on profit taking.

TODAY’S OUTLOOK

As the market opens this morning, expect mixed performance, against the backdrop of the fact that more companies are expected release their numbers to continue the earnings reporting season. Investors should not panic on the pullbacks if they have taken position based on strong numbers and future prospects of any stock. But quickly bail out when your expectations are not met when the actual figure hit the market to cut loss.
Again, we advise that investors allow numbers to guide their decisions to reposition for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of recovery economic fundamentals, if the numbers will support the price reversal or continuation.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Once more, at the risk of repeating oneself, we must reiterate that industry potential is very important when picking a stock, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry, especially now that the economy is recovering. For stocks that should be on your shopping list to buy in this oscillating market or pullbacks. Sign up for investdata buy & sell signal setup by calling 08032055467.

NSEASI DAILY TIME FRAME

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1. The Toolbox of Successful Traders & Technical Analysts- Mr Meshach Ukpoma, FX Analyst/Trader
2. Outlook and Implications of the 2017 Budget & Petroleum Industry Governance Bill (PIGB) on Nigeria’s Stock Market and Economy- Abiola Rasaq, Group Head Investor Relations, UBA
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TIME: 9.00am
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MR. OMORDION AMBROSE
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INVESTDATA CONSULTING LIMITED
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