MARKET UPDATE FOR APRIL 24, 2017
Trading activities on the floor of the
Nigerian Stock Exchange on Monday recorded the highest daily gain in a very
long while, on positive reaction to first earnings reports that were released
to the market during trading session. The numbers, most for first quarter
score-cards surprised investing public as some companies that reported full
year negative earnings position reversed to give insight of what the 2017
financial will look like if the current tempo is sustained to year-end. Before
now the few earnings reports made available reflected mixed performance,
meaning that if subsequent numbers go positive as more are expected to hit the
market today, it might pull the market out of negative territory year-to-date
to support the seeming positive macro-economic data released so far, showing that
the economic is on recovery path.
While it is true that the 2017 budget is
still being expected, just hours to end of the year’s fourth month, commitment
by the Central Bank of Nigeria (CBN) to the supply foreign exchange to the
broad segment of the nation’s financial market is paying off. INVESTDATA believes
that the intervention is sustained as the apex bank has assured on several
occasions,it will boost national output and awaken many businesses that has
gone into coma. This is especially true of the special FX window created
recently for investors and exporters to bid for forex at market rates to meet their
demands, as well as for those who are wishing to repatriate their dividend and other
investments. It is clear now that the CBN
understands that the supply side has remained the problem of the forex market
and is addressing it with the seriousness it requires.
The volume index on Monday was at 0.87,
while buying position was 94% and selling volume 6% of the day’s total, to
reverse the previous day trading mixed investor sentiments to an upmarket on
positive sentiments on company earnings.
In the same
direction, stock markets around the world closed higher on Monday on positive
response to the successful first round of the French election won by 39-year
old Emmanuel Macron, thereby reducing the political risk facing the global
economy, despite continuing oscillation of the oil price on shaking confidence
in the commitment of the Organisation of Petroleum Exporting Countries (OPEC)
to its deal reached late last year, amidst concerns over North Korea and reactions from
China and others who are observing.
Meanwhile,
the composite NSE All Share Index gained557.68 basis points to close at
25,747.05 points, from an opening figure of
25,189.37 points, representing a 2.21% growth on above average volume of traded
of the market and higher, when compared to previous day’s volume. Similarly, market capitalisation for the day gained N192.96bn closing at
N8.91tr, from an opening value of N8.73tr, representing 2.21% appreciation in
investor’s portfolio.
The upturn recorded in Lafarge Africa,
ETI, 7UP, Dangote Cement, GTBank, Zenith Bank, Nigerian Breweries and Forte Oil
impacted the All Share index, reducing year-to-date negative position to 4.20%,
while market capitalisation adjusted to N338.14bn, representing 3.66% loss YTD,
from the year’s opening value.
Market breadth for the day was positive
and strong as the number of advancers outnumbered decliners in the ratio of
19:11 to reverse the down market
Market activity in volume and value were
up by 23.40% and 27.03% respectively to 211.76mshares from previous day’s
171.61mshares, valued N1.41bnfrom previous day’s N1.11bn. Volume of transaction
was driven by shares of Diamond Bank, Fidelity Bank, Zenith Bank, FCMBand
Transcorp as the most traded equities.
The NSE All-Share index and all sectoral
indices were green, except for the NSE Consumer goods, NSE Insurance and NSE
Lotus 2 that were in red to close the day’s trading session.
During trading, the share price of Regency
Insurance and May & Baker were adjusted for dividend proposed by the
directors for the year ended December 31, 2016. Lafarge Africa, CAP, Transcorp and Stanbic IBTC
Holdings made available their first quarter earnings report to the market.
At the end of the day’s trading, Lafarge
Africa led the advancers log with 10.24% to close at N50.71 per share, driven
by impressive Q1 result; followed by Diamond Bank with 5.56% to close at N0.95 as
market forces react to expected numbers that came below estimate.Nascontopped
the decliners’ log, shedding 4.91% of its opening value to close at N7.36,
market forces ahead of Nestles 4.90% slide to close at N713.50 on market forces.
As market opens this morning, we advise
that investors allow numbers to guide their decisions to reposition for Q2
trading as the first quarter earnings reporting season is ongoing. Industry
potential is very important when picking a particular company, because there
are things that are sector-wide and would naturally impact positively or
negatively on companies operating within such an industry.
Technically, the market has formed a
double bottom and at the same touching the lower Bollinger bands to rebound on
improve volume, in addition to positive sentiment as revealed by volume index.
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