MARKET UPDATE FOR APRIL 25, 2017





STANBIC IBTC FORESHADOWS EXPECTATION, AS BANKING PEERS DELAY FILINGS

The nation’s stock market indices continued its uptrend in the second day in a row as equity prices moved up on increased demand as investors re-positioned in the market on the strength of Q1 financials that is pointing to a brighter 2017 full year, if the ongoing economic recovery efforts are sustained, going forward. This would ensure that the earnings power of listed companies continues to improve thereby supporting the price rally. This suggests that medium to long-term positioning in the market at this point will help investors recoup their losses and return to profit. 

This is also coming at a time more companies are yet to release their first quarterly results for the year, especially banking stocks, with Stanbic IBTC Holdings being the only exception. Stanbic IBTC has presented its numbers to the market, giving a hint of what should be expected from peers like Zenith Bank, Access Bank, UBA, GTBank, FBNH and FCMB, among others.

Tuesday’s volume index was at 0.53, while buying position was 66% and selling volume 34% of the day’s total, to continue previous day’s bull sentiment that supported the upmarket on improving company earnings.
The global markets maintained terrific follow through for two trading days of up market with some gapping up on the successful French election and seeming reduction of political risk facing the global economy ahead of that UK election. This was despite the continuing oscillation of the oil prices, amidst concerns over North Korea and reactions from China and others who are observing. Also the strong numbers from the international companies have impacted the world market positively, notwithstanding the unstable global economic situation. 

Meanwhile, the composite NSE All-Share index gained 71.82 basis points to close at 25,818.87 points, from an opening figure of 25,747.05 points, representing a 0.28% growth on low volume traded when compared to previous day’s volume. Similarly, market capitalisation for the day gained N25bn,closing at N8.93tr from an opening value of N8.91tr, representing 0.28% increase in value at the end of the day.
Price appreciation recorded by medium and high cap stocks impacted the All Share index to further reduce year-to-date negative position to 3.93%, while market capitalisation adjusted to N313.14bn, representing 3.39% loss YTD, from the year’s opening value.

Market breadth for the day remained positive and strong as the number of advancers outpaced decliners in the ratio of 24:12 to continue the bull transition.
Market transaction in volume and value were down by 39.82% and 18.08% respectively to 127.43m shares from previous day’s 211.76m shares, valued N909.33mfrom previous day’s N1.41 billion. Volume of transaction was driven by shares of FCMB, NEM, Zenith Bank, UACN and Transcorp as the most traded equities.

The NSE All-Share index and all sectoral indices were green, except for the NSE Consumer goods and NSE Premium that were in red to close the day’s trading session.

Towards the end of the day trading, Cadbury Nigeria Plc  made available its first quarter earnings report to the market with mixed numbers as earnings per share declining by 86% to 5 kobo from 36 kobo each  posted in 2016.

At the end of the day’s trading, Ashaka Cement led the advancers log with 10.19% to close at N9.95 per share, driven by impressive Q1 result; followed by UACN Property with 9.71% to close at N1.92on low price attraction and expected increase in home sales.
Champion Breweries topped the decliners’ log, shedding 4.86% of its opening value to close at N2.35 on market forces, next was Learn Africa with 4.65% slide to close at N0.82 on market forces as the market expects it closure date of register.

As market opens this morning, we advise that investors allow numbers to guide their decisions to reposition for the rest of the year trading as the first quarter earnings reporting season is ongoing despite the few days to submission deadline. 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. Also MACD turned bullish yesterday to confirm bull trend but combine your technical with fundamental to position.


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