MARKET UPDATE FOR APRIL 24, 2017





INVESTORS REACT TO POSITIVE NUMBERS, AMIDST HOPE OF SUSTAINED GROWTH, PROFIT

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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