Market Update for September 25
The Nigeria stock market had a difficult session as it started the last week of September, Monday, red. The index gapped lower on the continued wait-and-see attitude of investors and traders for the outcome of the two-day Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting today, as medium and high cap stocks suffered price declines.
The market attempted to bounce back to resistance, but the early rally attempt was stalled and rolled over sharply, with the index really pushing back hard into midday when it attempted to reduce the loss position. The market had broken out the downtrend line but on sideways movement, awaiting positive news and end of the quarter/month rebalancing of fund managers’ trading accounts to push prices up ahead of earnings season trading by speculators.
As we have earlier said, smart money is using the ongoing correction in the market to accumulate in some stocks with great potentials to reward investors and sustained their share price, going forward. For instance, on Monday, 200,000 units and 300,000 units of Nestle Nigeria were crossed to foreign investors at N1,230 and N1,250 respectively by domestic sellers. This suggests that these people are still seeing value in the stock despite the seeming overpriced condition of the company.
Traders and investors should take the opportunity of the current lower-lows and higher-lows during this correction to reposition in value stocks with strong potential to rally.
Volume index for the day stood at 0.45 and buying position at 47%, and 53% selling volume of the day’s transaction which halted previous day’s up market shows that players were awaiting the outcome of CBN’s monetary policy meeting, despite expectations that the committee would vote to retain all monetary policy instruments. This is also not unconnected with the fact that, for now, oil continues to sell above $50 barrels per day, a situation that has impacted the nation’s reserve positively put at $33bn by the CBN. It is expected that other measures to boost confidence and attract more foreign exchange inflows and sustain the economic recovery would be put in place to support what the CBN is doing before now and what Nigerians are looking forward to see from the fiscal authorities.
Meanwhile, the composite NSE All Share Index shed 130.08 basis points to close at 35,361.52 from the 35,488.81 points opening level which represented a 0.36% decline, just as market capitalisation for the day dropped by N44.48bn to close at N12.19tr, from the previous session’s N12.2tr, representing 0.36% depreciation in investors’ portfolios.
Price depreciation in the share prices of Oando, UBA, Access Bank, Lafarge Africa, Nestle, GTBank, NB, FBNH and Zenith Bank, reduced the All-Share Index’s year-to-date return to 31.58%, just as market capitalisation year-to-date gain stood at N2.41tr, representing 31.82% above the year’s opening value.
Market breadth for the day was positive as the number of advancers outnumbered decliners in the ratio of 19:17 on a very low volume traded that was lower than the previous day’s level to halt the one day bull market.
Market activities in terms of volume and value were down by 44.25% and 62.84% respectively with an exchange of 107.15m shares worth N1.37bn, as against the previous day’s 192.2m units valued at N3.68bn recorded in the previous session.
Transactions in the shares of Meyer, FCMB, Niger Insurance, FBNH and Transcorp topped the volume chart, just as Fidson Healthcare topped the advancers’ log with a 5.00% gain to close at N3.13 per share on market forces and expected Q3 numbers, followed by Newrest ASL with a 4.99% notch at N7.16 per share on market sentiment. On the flipside, Jaiz Bank lost 4.29% to close at N0.67 on market forces, followed by Skye Bank, which shed 3.64% to close at N0.53 per unit on market forces.
TODAY’S OUTLOOK
The market continues to search for direction after the recent breakout of the downtrend line. While confirming the recovery, the market is still waiting for more positive news to leave the sideways movement, especially if the feelers from the MPC meeting are positive. Volatility in the market is expected to continue as trading opens this morning, amidst profit taking, September quarter end, Q3 earnings season and year-end activities. We expect the Nigerian government to review its 2017 budget implementation strategy and put in place some fiscal measures that would help the monetary authorities sustain the ongoing economic recovery as shown by the positive but fragile GDP to further help to drive inflation numbers down faster than the August level to make growth and development a reality.
One thing that is clear in the current market situation is that smart investors are using the ongoing correction to accumulate and enhance their positions in some stocks.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year trading activities, especially now that prices of stocks are looking down amidst improving economic and market fundamentals.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Meanwhile, Plan to attend the Independent Day Free Investment Education Summit jointly organised by APT Securities & Funds Ltd/Investdata Consulting Ltd, because real independent is financial freedom.
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The workshop holds on:
DATE: October 2. 2017
TIME: 10am – 2.00pm
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.
What you will learn at this the Independent Day free workshop:
1. The fundamentals of stock trading and investing
2. Trading and investing strategies that will help you manage your risk, protect your capital and profit from market correction.
3. How to trade on your own online, using the APT eTrade platform on your phone and laptop.
4. The psychology of trading and investing and how it will make you successful.
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There will be sales of stock trading and investing materials for further understanding at the end of the workshop, Fundamental and Technical Analysis materials, including home study packs you can play and viewed on your phone, laptop and television set, all at 20% discount for attending. You need to prepare yourself and profit from the market and the recovery economy to truly achieve your financial independence and freedom.
For more enquiries about the programme, please call 08028164085, 08034053018 and 08111811223
Ambrose Omordion
CRO | Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
