MARKET UPDATE FOR THE WEEK AND OUTLOOK FOR MARCH 20-24

Stock prices on the floor of the Nigerian Stock Exchange were on the uptrend as confidence is gradually rekindling at the middle of earnings season with positive response to inflation figures released by the National Bureau of Statistics (NBS) during the week. 

Also, traders moved to equities that were adjusted for dividend recently to trade their support and resistance levels for very short-term profit, added to the impressive earnings reports from Continental Reinsurance and Total Nigeria Plc. 

The composite NSE All-Share Index gained 415.15 points to close the week at 25,653.16 points, from an opening figure of 25,238.01 points, representing a 1.64% growth for the period on a higher volume of trade compared to the previous week. 

Buying volume of total transactions for the week was 96%, while selling position was 4% to sustain the two week’s bull transition.  Similarly, market capitalisation for the period closed higher at N8.88 trillion, from an opening value of N8.73 trillion, representing a 1.64% wealth created for investors. 

Topping the advancers log for the week were low and medium cap stocks as traders and investors adopted new strategies to trade the high volatile market to the trending situation witnessed so far.

The value appreciation during the week reduced the NSEASI's year-to-date negative position to 4.55%. Also within the same period,drop in market capitalisation reduced to a loss of N368.85 billion, representing 3.89% decline from the year’s opening value.

Market breadth was positive and strong as number of advancers outweigh decliners in the ratio of 31:22 on improved volume of trades that were bullish on strong accumulation by smart money and others in expectation of  impressive numbers from financial sector and others for the 2016 results, ahead of the Q1  2017 performance scorecards in April. 

Stock markets over the world during the week were mixed, as the global interest rates was hiked in the midst of oscillating crude oil prices have been of concern to investors, in the face of the successful election in Europe, while U.S President and the legal institutions are in the opposite direction on immigration ban imposed on nationals some country.

The U.S markets over the week were mixed as government bond and the US$ took a plunge in response to Federal Reserves rate hike during the period, while equity prices are searching for direction. This is just as investors interpreted the impact of the hike on the market as inflationary pressure under way despite the seeming impressive employment data that supported a strong economy. And at the same time looking to how President Donald Trump’s maiden budget and policy on infrastructural spending to boost activities in the face of expected reduction in tax burden on businesses and individuals. The central bank also revealed it plans to hike rate two more times in the year. 

Japan’s Nikkei was down during the week as U.S market indices were mixed in reaction to the rate hike, while Germany‘s DAX and  Britain’s FTSE 100  were up for the same  period, as successful election in the region that boosted investor confidence.  

In Europe, despite the seeming divisions over European Central Bank (ECB) having central monetary policy for the zone, investors applaud Mark Rutte’s victory over Geert Wilders a populist candidate in the Netherland’s election.  In Asia,the Bank of Japan offered an upbeat assessment of the country’s economy but held its fire, citing external risk.

Back home, the index opened the week on a negative note, losing 0.4% which was reversed the following trading session with  again of  0.59%which was  sustained in the remaining trading sessions of the week with 0.07%, 0.46% and 0.92% respectively to bringing the week’s cumulative gain to 1.64% on a strong demand for equities. 

The composite index and all the sectoral indices for the period were higher, except for the NSE Consumer Goods that closed 0.02% lower%, while the NSE Asem was flat.

The week’s total transaction levels, measured by aggregate volume and value were mixed as volume was up marginally by 0.98% to 1.03 billion shares from 1.02 billion shares, just as value was down by 36% to N7.98 billion from N12.46 billion. This was in contrast to the closing levels of previous week.

In the week under review also, a total of 1.03 billion shares valued at N7.98 billion were traded in 13,441 deals, compared with 1.02 billion shares worth N12.46 billion, exchanged in 16,400 deals in the previous week.

During the week, the share prices of Zenith Bank and Access Bank were adjusted for dividend.  As mentioned above Continental Reinsurance and Total Nigeria released their 2016 full year earnings reports with dividend recommendation (See the Price and Earnings Tracking for dividend declared), while Okomu Oil and others notified the exchange of the board meeting.

The investing community was also notified that Guinness Nigeria Plc has through its Stockbroker; Stanbic IBTC Stockbrokers Limited, submitted an application to The Exchange for approval of its Rights Issue of 684,494,631 Ordinary Shares of 50 Kobo each at N58.00 per share on the basis of five new Ordinary Share for every 11 Ordinary Share held.The Qualification Date for the Rights Issue was Wednesday 15 March 2017

Diamond Bank and Ucap led the advancers’ log with 16.05% and 15.70% respectively to close at N0.94 and N2.80, while the flip side was topped by NEM Insurance  and 7-Up, which suffered 10.99% and 9.64% decline to close at N0.81and N77.71 respectively. 

Market Outlook                   

The market this week is likely to oscillate due to profit booking and reactions to expected earnings release as more 2016 financials are likely to hit the market with some surprises and disappointment.

Again, the time to combine technical and fundamental analysis for your trading decisions is now, to enable you know the support and the resistance levels. 

Train yourself and study to know the new approach to adopt at this point and going forward, get your comprehensive short term trading pack.  

To join our webinar every Friday 8pm to 9pm, WhatsApp group and get market updates, SMS web*name*email to 08124050850

STOCKS TO WATCH

Eterna, Fidelity Bank, Fcmb, Presco,Aiico and Zenith Bank.

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Sub-topics 

1, Outlook of the Economy for 2017 & How to Navigate the Stock Market in a Recessive Economy By AlhajiGarbaKurfi, Managing Director of APT Securities & Funds Limited.

2, Trading News with Support and Resistant Trend lines Using Technical Analysis ByMr. Abdul-Rasheed OshomaMomoh, Head, Capital Market in TRW Stockbrokers Limited.

3, The Safest Recession-Proof Investing Techniques for 2017, By MrAdonri David, Managing Director of HighCap Securities Limited

4, 10 Top Recession-Proof Dividend Stocks for 2017 By Mr. Ambrose Omordion, Chief Research Officer, InvestData Consulting Limited.

In equity investment, seasonality and price momentum flow together and this is a game-changer for smart traders and discerning investors who know the forces  behind the full-year earnings season in the first quarter of 2017. 

Seasonal trend statistics have been repeated as often as 85 to 100% of the time. The trends and all the statistics have been revealed in the Home Study Pack of DVD’s and softcopy of presentation at the   one-day workshop tagged: INVEST 2017 TRADERS & INVESTORS SUMMIT.  

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e, Revealing the top 10 recession-proof Dividend  stocks expected to deliver dividend growth in 2017

F, 25 Stocks with Dividend cut in 2017

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i, How flow of funds boost market fundamental and determine direction.

J, How to identify specific profit drivers in a sector and the market.  

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