Volatility Continues As In Investors Position In Value Stocks, Amidst Profit Taking Activities

Market Update for December 11

It was indeed another volatile Monday on Nigeria’s stock market as profit booking by traders and investors extended to its second day to start the week.
Moreso, technicals were weak, confirming the sell market at this point, but the price patterns were mixed as players also take the opportunity of the current pullback to reposition and accumulate stocks with steady earnings growth and surprises that had given insight of what should be expected at the end of the year.
The day started out with a little upside in the morning that failed to consolidate in the mid-morning, before pulling back in an orderly fashion. At the end of the day, the market’s benchmark index closed lower after hitting intraday high of 39,292.21 basis points and low of 38,891.25, breaking the 39,000 psychological line in search of another support level not far from the former resistance level of 38,241.57.
Data analysis by experts at the weekend’s INVEST 2018 traders & investors summit revealed subtle opportunities between the performance of companies and the ongoing economic recovery, and the need for investors to stay with value enhancing stocks to generate good returns to protect their capital. This they agreed, is important, especially as the Central Bank of Nigeria (CBN) continues its intervention which is impacting positively on the foreign exchange window of the inter-bank market, inspiring confidence among foreign investors, leading to more forex inflows that further supports the market and economic recovery.
Also, the recent release of additional N750bn from the 2017 budget for capital projects is also expected to have positive impact if the infrastructural projects are executed faithfully to further expand Nigeria’s economy in 2018. Being a pre-election year, 2018 offers great opportunities and uncertainties, but the ability to navigate and the type of equities you position in will determine your level of profit.
Monday’s trading volume index stood at 0.75 with selling pressure of 94% and buying volume, 6% of the total transaction to keep the bear running on profit taking.
Meanwhile, the composite NSE All-Share index shed all of 343.54 basis points to close at 38,913.99, from the 39,257.53 points, representing a 0.88% decline, just as market capitalisation fell by N119.65bn to N13.55tr, from previous day’s N13.67tr, representing a 0.88% value loss. The two-day downturn resulted from price depreciation in low, medium and high cap stocks that impacted negatively on the ASI’s year-to-date returns, as it dropped to 44.80%, just as YTD growth in market capitalisation fell to N4.31tr, representing a 46.56% rise over the year’s opening value.
Market breadth for the day was negative as the number of decliners outpaced advancers in the ratio of 28:14 on a relatively high traded volume that was lower than previous day’s level.
Transactions in terms of volume and value were down by 33.86% and 4.01% respectively to 350.6m shares worth N4.92bn from previous day’s 530.08m units valued at N5.12bn. The day’s activity was driven by FBNH, Zenith Bank, Diamond Bank, Access Bank and Transcorp, which topped the volume chart.
At the end trading, Mobil and National Salt topped the advancers table, gaining 9.47% and 4.99% respectively to close at N174.96 and N18.74 on positive market forces.
On the flipside, Learn Africa and UBA shed 5% to close at N0.95 and N10.45 respectively on market forces and profit taking, ahead of C&I Leasing 4.83% loss to close at N1.37 each, on market forces.


Market volatility will continue as traders take profit from the recent rally, while at the same time smart money continue their accumulation of shares ahead of 2018 earnings reporting season and Santa Claus rally amidst the improving and positive economic data. As foreign fund managers look to emerging market in 2018 as developed markets seem overvalued already.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, 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. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
Get your home study pack on INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable. You can also still access stocks analysed in the home study pack of the INVEST 2018 traders & investors summit, which will be available this Friday.
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. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd

Tel: 08028164085, 08032055467