MARKET UPDATE FOR APRIL 27, 2017

POSITIVE Q1 BANKING EARNINGS MAY LIFT MARKET AS TRADING OPENS TODAY

The Nigerian stock market Thursday had a mixed, buy interesting trading session as the composite index reversed on impressive Q1 numbers that beat market forecast, despite the fact that the results were released to beat the April 30 regulatory deadline.  

Trading started out with early morning’s upswing before adjusting down slightly, due to end of the month profit taking, before rebounding as impressive  banking earnings and  news started hitting the market, triggering positive sentiments again as the investing community  reacted to the numbers.  The figures were good as they combined to give the market direction. 

Thursday volume index was at 1.44, while buying position was 72% and selling volume 28% of the day’s total, to halt previous day’s bear sentiment, as market reacted positively to improving company earnings.

The global economy is expected to benefit from the European Central Bank and Bank of Japan’s continued quantitative easing(QE)expected to pump liquidity.

Both central banks have met and displayed no signs that they might be staving off QE, or taking tothe exit doors -- following the Fed's path of "removing emergency level policies". QE continues to promote higher asset prices and recovery in Europe and Japan, it promotes stability in the European sovereign debt markets (which promotes stability for the global economy), and it all keeps a lid on U.S. market rates. 

Meanwhile, the composite Nigerian Stock Exchange (NSE) All-Share index gained 132.06 basis points to close Thursday at 25,753 points, from an opening figure of 25,620.94 points, representing a 0.52% growth on a high volume traded, when compared to previous day’s volume. Similarly, market capitalisation for the day was up by N45.69bn, closing at N8.91tr from an opening value of N8.87tr, representing 0.52% value gained. 

Price appreciation in highly capitalized stocks like Stanbic IBTC, GTBank, Zenith Bank, UBA, Access Bank, FBNH, Dangote Cement, Nestle and NB impacted the All Share index to reduceyear-to-date negative position to 4.17%, while market capitalisation adjusted downby N335.93bn, representing 4.63% loss YTD, from the year’s opening value.

Market breadth for the day remained positive and strong as the number of advancers outnumbered decliners in the ratio of 22:15 to reverse the previous day down market.

Market transaction in volume and value were up by 45.37% and 68.26% respectively to 371.76mshares from previous day’s 255.73mshares, valued N2.81bnfrom previous day’s N1.67bn.

The NSE All-Share index and all sectoral indices were mixed as NSE Consumer Good, NSE Insurance, NSE Industrial Goodsand NSE Lotus that were down to close the day’s trading activity.

During the day’s trading, 18 companies released their quarterly earnings reports including, Trancorp Hotel, Access Bank, UBA, ETI, FBNH, UBN, NAHCO, Champion Breweries, Prestige Assurance and others

At the end of the day, Livestock Feeds topped the advancers log, as its share price notched 9.68% to close at N0.68,on impressive Q1 earnings report, followed by Stanbic IBTC with 6.75% to close at N25.00, still on strong numbers.  On the other hand, Unilever Nigeria led the decliners log by 9.70% to close at N32.05 on dilution of share through Rights issue; while Lafarge Africa was next with 5.83% to close at N48.50 on profit taking. 

As market opens this morning, we advise that investors allow numbers to guide their decisions to reposition for the rest of the year’s trading especially with the first quarter earnings reporting season is ongoing, despite the few hours left of the submission deadline.

Industry potential is very important when picking a particular company, because there are factors that are sector-wide and would naturally impact positively or negatively on companies operating within such an industry.

Technically, the market reversed yesterday on a strong volume that supported market breadth. Meanwhile,trending ability and direction is still wake as ADX is below 20 at 13.63 while MFI is looking up to indicate money is entering the market as at close of trade. MACD still bullish as at Wednesday but combine technical with fundamental to position.

NSEASI ON DAILY TIME FRAME

Let see what today holds for the market, keep your eye on the trend.