MARKET UPDATE FOR JUNE 12
The investing community’s worry as regards the delayed assent to the 2017 budget following the joggling of figures by the National Assembly has finally abated with its being signed into law by Acting President Yemi Osinbajo, on the order of President Muhammadu Buhari in a June 9 letter to the Minister of Budget and Planning, Senator Udoma Udo-Udoma. The signing into law is expected to kick-start implementation of projects and progammes that will bring the long expected second leg as contained in the Economic Recovery and Growth Plan (ERGP) that would go a long way to support the monetary policies of the Central Bank of Nigeria (CBN).
It would be recalled that the apex bank has in recent months carried out strategic reform by way of interventions aimed at making foreign exchange readily available to all segments of the market to further drive economic recovery and thereafter usher it into the growth phase as contained in the ERGP unveiled in February.
Also, the rebound of oil price on Monday has in a way shown the resilience of oil cartel- the Organisation of Petroleum Exporting Countries (OPEC)to manage supply, thereby helping to sustain the price above $50 per barrel. Oil, at the international market, is projected to hit $60pb before year end.
Meanwhile, the Composite index NSEASI
for Monday shed a slim 41.40 basis points to close at 33,235.28, after opening
at 33,276.98 points, representing a 0.12% decline on a high volume traded.It
was however lower when compared to previous day’s transaction level. Volume
index for the day was 1.05 with a buying position of 57%, while selling volume
was 43% of the total transactions for the day. Market capitalisation for the
day wasdown by N14.31bn to close at N11.49tr, from an opening value of N11.5tr,
representing 0.12% depreciation in investors’ portfolios.
The
downturn in the share prices of
International Brewery, 7-Up Bottling Company, Nestle, Total, FBN Holding,
Oando, UBA, FlourMils, Seplat, FO, Zenith Bank impacted the All-Share index
negatively, reducing the year-to-date return to 23.67%, while growth in market
capitalisation for the same period stood at N2.25tr, representing a 24.25% rise
above the year’s opening value.
Market
breadth for day wasnegative as the number of decliners outpaced advancers in
the ratio of 30:20on high volume of trade to halt the three-day up market.
Market
activities in terms of volume and value were mixed as volume went down by
26.99% to 501.08m shares from previous day’s 686.3m shares while value was up
by 0.66% to N6.11bn from the previous day’s N6.07bn. Transactions in the shares
of ACCESS BANK, FCMB, GURANTY TRUST BANK, FBNH and TANSCORP topped the volume
chart to close the day’s trade.
At
the end of the trading, AshakaCement topped the advancers’ log with its share
price gaining 10.09% to close at N12.77 per share, on the back of the ongoing
consolidation of its business with that of sister company- Lafarge Africa Plc.
It was followed by May & Baker with a 9.86% gain to close at N3.12 per
share, impact of the Memorandum of Understanding (MoU) with the government to
produce vaccine.
On
the flipside, International Brewery led the decliners’ log, after dropping 8.63%
to close at N29.45 on the back of weak earnings following which the directors did
not propose a dividend for approval at the next annual general meeting and
profit taking,while UACN followed with 5.84% to close at N17.40 each on profit
taking.
As
the market opens this morning, expect mixed action of profit taking and
repositioning in value stocks to continue with Monday’s signing into law of the
2017 budget, ahead of the release of May inflation figures. All things
considered, investors should not panic on the recurrent pullbacks 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
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