MARKET UPDATE 31
The Nigerian equities’ market in
September had a mixed performance but finally closed green after four months of
negative trend, even at the peak of second quarter earnings season. This
reflected the weakness of corporate earnings at the late contraction stage of
the national economic cycle of the nation.
The rebound of the market in an off earnings season is a sign of
confidence returning and indeed that the market is in recovery mode, but its
sustainability would depend on the strength of numbers released during the
third quarter earnings season that would
kick-off in October, as well as the Federal government efforts at revitalizing the economy.
The positive close of September with the Composite NSE All Share Index recording 5.16
per cent gain to close at 31,217.77 from an opening figure of 29,684.84 basis
points, a different of 1,532.93 points.
The year-to-date negative return rose to
11.74per cent due to down market of last Friday that closed at 30,588.61.
Market Capitalisation for the period under review also closed at N10.73 trillion
from an opening value of N10.21 trillion. Despite the mixed performance
recorded in the month’s trading sessions, market breadth remained positive and
strong. The profit taking noticed on the first trading day of October is in
order and as expected after five consecutive days of the up market.
Contrary to the positive slant of the
domestic Course, the global equities market had a turbulent time as investor
confidence and growth rate deteriorated in the major economies of the world, as
China, U.S and European macro-economic numbers are mixed. US and Chinese stocks
declined on reports concerning the manufacturing, purchasing capacity and even
job claims that are below market and analyst’s expectations.
NSE ASI Daily Chart
On the daily chart, the NSEASI continued to
rally after breaking out of the ascending triangle formation to experience a
pullback on the first trading day of October due to profiteering by traders.
Despite the reversal in trend, the market is still trading above its 50-day
moving average. The very short bull
transition in a recovery is in order until market sentiment in the new week
determines direction. With earnings season in perspective.
NSE Monthly Chart View.
The chart
revealed a monthly downward movement as the market remained in a bearish
channel, any reversal at this point with break out of the downward trend line
would usher in a strong bull market. This broader view gives insight that
support the daily chart reading. As the pullback was as a result of profit
booking on the heavyweight stocks with relatively small volume.
Market Outlook for
October
On the strength of the President’s Independence
Day speech, the market and the economy go nowhere because there were no
different economic policy statement that would chatted. The nation’s staticeconomy
in dire need of revamping, this would have come from an inspiring and
motivational speech. But a combination of the ministerial nominees being assigned
portfolios after senate approval and the advent of the thirdquarter earnings
season is expected drive market sentiments to remain mixed. Also coupled with
the expected prudence and probity in the nation’s governance and fiscal environment to
support the external reserves to attract more institutional investors, if a
clear real change economic policy is articulated and driven by serious commitment
to empower Nigerians, rather than extorting the people.
Trend of October
Market Performance in the last decade
|
Year
|
Market Index
|
% Change
|
Remarks
|
|
2006
|
32,643.63
|
0.27
|
Up Market
|
|
2007
|
50,201.82
|
-0.05
|
Down market
|
|
2008
|
36,325.86
|
-21.40
|
Down market
|
|
2009
|
21,804.68
|
-0.95
|
Down Market
|
|
2010
|
25,042.16
|
8.64
|
Up market
|
|
2011
|
20,934.96
|
2.76
|
Up market
|
|
2012
|
26,430.92
|
1.61
|
Up market
|
|
2013
|
37,622.74
|
-2.84
|
Down market
|
|
2014
|
37,550.24
|
-8.88
|
Down market
|
|
2015
|
?
|
?
|
|
|
|
|
|
|
STOCKS TO WATCH
NB, ACCESS BANK, United Capital, UBA, FBNH, FCMB
AND CAP
STOCKS WITH Q3
EXPECTED INTERIM DIVIDEND
Nestle, CAP, NB, Total and with more likely to
join the interim dividend policy
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