AGAIN, NIGERIA’S ASIATNEW YEAR HIGH, AMIDST WAIT FOR POSITIVE MSCI INDEX ANNOUNCEMENT
MARKET UPDATE FOR JUNE 5, 2017
The growing demand for equities continued among investors on the floor of the Nigerian Stock Exchange on Monday, sustaining the bullish trend in the process, with more stocks hitting new highs. In the process also, the bourse recorded the highest daily gain in the last four years on a huge volume of trades, with a 4% in trade gain before the composite All Share index closed for the day at 3.85%. The Industrial sector emerged the biggest contributor, chalkinga 6.49% gain to close at 1,974.02. All sectorial indexes for the day closed in the green except the NSE Asem Index which remained unchanged.
The rekindling confidence in the market
is being driven by a combined effect of improving liquidity in the FX market and
the seeming improvement in corporate earnings as revealed during the just
concluded season.
While the FX liquidity has been greatly
enhanced through the import and export window recently created by the Central
Bank of Nigeria (CBN) as part of easing access to foreign exchange to meet
genuine customer demands, which has greatly supported and helped the naira
appreciate, the corporate earnings further boosted the market’s fundamentals.
In any case, stock valuations remain low, despite the current rally when
compared to other Africa markets looking at theirs hare Price to Earnings (P/E) ratios.
The recent rebound in Nigeria’s stock market has resulted
in a 21.22%Ytd return on investment,following increased interest shown by foreign
investors whose share now stands at 45.84%, up from 40.83% in the same period
of 2016.
INVESTDATAis therefore confident that Nigeria will
be retained in the MSCI Frontier Markets Index when a decision is finally
announced later this month.The announcement could further boost the ongoing rally,
considering the funds that track the index as many Nigeria stocks in that
basket are still undervalued.
If the Federal Government is ready to do the
needful or walk the talk, it would greatly enhance the nation’s economic recovery
and further boost confidence in the system and stock market. A starting point
would be for the 2017 budget to be signed into law without further delay to commence
the immediate implementation of Economic Recovery and Growth Plan (ERGP). This
is the only way to achieve the projected recovery in the economy from
recession.
Meanwhile,
the NSE’s composite All-Share index gained 1206.75 basis points on Monday to breakout
another psychological line of 32,000 on a day trading close at 32,578.38, after
opening at 31,371.63 points, representing a 3.85% growth. Although volume
traded remained huge, it was however lower,when compared to previous day’s
transaction level. Similarly market capitalisation rose by N417.18bn to close
at N11.26tr, from an opening value of N10.85tr, representing a 3.85% value
gained in investor portfolio.
The
uptrend in prices of high cap stocks during the day impacted the All-Share
index positively; further boosting year-to-date return to 21.22%, while market
capitalisation for same period stood at N2.02tr, representing 21.80% above the
year’s opening value.
Market
breadth for Monday remained positive as the number of advancers outnumbered decliners
in the ratio of 44:13 on huge volume of trade to continue the bull-run.
Market
activities yesterday in terms of volume and value were marginally down by 9.59%
and 7.30% respectively to 640.24m shares from previous day’s 708.41m units and N7.68bn,
compared to previous day’s N8.26bn. Transactions in the shares of FBNHoldings,
FCMB, FIDELITY BANK, ZENITH BANK, AND SKYE BANK topped the volume chart to
close the day’s trade.
At
the end of Monday’s trading session also, Mobil Nigeria topped the advancers’
table with its share price gaining 10.25% to close at N319.72per share, purely
on the activities of market forces. It was followed by Conoil with a 10.23%
gain to close at N41.17 per share against the backdrop of the expected late filing
of its 2016 full year earnings report.
On
the flipside, Union Dicon led the decliners’ table, dropping 4.95% to close at
N13.45 also on the interplay of demand and supply; C & I Leasing followed
with a 4.55% to close at N0.63 each on profit taking.
As
market opens this morning, expect mixed action of profit taking and
repositioning in value stocks to continue in a galloping market, which means
investors should not panic if they take position based on strong numbers and
future prospects of any stock.
Again,
we advise that investors allow numbers to guide their decisions to reposition
for the rest of the year’s trading activities, especially now that prices of
stocks are looking up ahead of recovery economic fundamentals, if the numbers
will support the price reversal or continuation.
It
is time to use your technical tools to take decision by knowing the support and
resistant level to reposition or exit any position.
Once
more, at the risk of repeating oneself, we must reiterate that industry
potential is very important when picking a stock, because there are factors
that are sector-specific and would naturally impact positively or negatively on
companies operating within such an industry, especially now that the economy is
recovering. Invest wisely and sign up for investdata buy & sell signal
setup and the upcoming Traders & Investors workshop call 08032055467 and
08111811223
NSEASI
DAILY TIME FRAME
The volume index for the yesterday was 1.57 as buying position was 93%, while selling volume was 7%, yes still a bullish sentiment but signal imminent pullback as traders cash out profit from the rally. Trade with caution.
INVESTDATA CONSULTING LIMITED
Email: ambroseconsultants@yahoo.com, investdatng@gmail.com
Website: www.investdataonline.com, www.investdata.com.ng
TEL:01-4724645, 08028164085, 07028061501
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