MARKET UPDATE FOR JUNE 19, 2017
The Nigeria equity market had a strong
gap up to start the week strong on Monday.
The day started off with a bang as the share prices rose sharply, with
the index running hard in the morning hours to cross the psychological line of
34,000 and remained up, touching a new high at 34,146.51 to close the day on
high transaction volume. Volume index stood at 0.92 on a buying position of 97%,
while selling volume was 3% of the total volume traded for the day.
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The Presidency and its economic team at
the end of public presentation of 2017 budget also on Monday said the administration
is ready to release an initial N350bn of the N2.36tr earmarked for capital
project for the year to Federal Government Ministries, Departments and Agencies
(MDAs), to kick start the implementation of the year’s budget. This is good but considering
the delayed passage and signing of the budget and the fact that implementation is
likely to commence in the second half of the year, the N350bn may be too small
to make the needed impact at this point to support the Central Bank of Nigeria
(CBN) monetary policy and intervention to induce the needed recovery of the
nation’s economy.
Meanwhile, stock markets around the
world were mixed to close Monday higher, despite the seeming over supply of
oil, while at the same time resisting further decline of price and political
crisis amidst last week’s major decisions by central banks. Stocks still
managed to close higher especially as U.S President Donald Trump meets CEO’s of
tech companies. At the same time, the Fed’s continues to justify the rates hike
as it watches other economic data that support and confirm the economic
strength of the world’s largest economy.
Back home, the composite index NSEASI
gained 324.54 basis points to close at
34,135.10, after opening at 33,810.56 points, representing a 0.96% growth on a high
volume traded. It was however marginally lower when compared to previous day’s
transaction level. Similarly, market capitalisation for the day was up by
N112.08bn to close at N11.80tr, from an opening value of N11.69tr, representing
0.97% value gained.
Price appreciation in the shares of
Total, Nigerian Breweries, Julius Berger, Guaranty Trust Bank, UBA, Lafarge
Africa, Dangote Cement,Stanbic IBTC, Presco and Flour Mills impacted positively on the All-Share index,
raising its year-to-date return to 26.72%. Also, growth in market
capitalisation for the same period stood at N2.44tr, representing a 27.35% gain
above the year’s opening value.
Market
breadth for the day remained positive as the number of advancers outpaced
decliners in the ratio of 28:19 on high volume of trade to continue the four
straight days of bull-run.
Market
activities in terms of volume and value were mixed as traded volume was down by
2.17% to 482.52m shares from previous day’s 493.24m, while value was N5.68bn.
Transactions in the shares of WEMA BANK, GUARANTY TRUST BANK, ACCESS BANK, FIDELITY
BANK and TRANSCORP topped the volume chart to close the day’s trade.
At
the end of trading, CCNN topped the advancers’ log with its share price gaining
10.17% to close at N9.75 each, on expectation of the impact of the planned
reconstruction of the nation’s insurgency ravaged North East geo-political
zone, among others. It was followed by May & Baker’s 9.87% gain to close at
N5.01 per share, on continued impact of the Memorandum of Understanding (MoU)
with the government to produce vaccine market forces.
On
the flipside, Chemical &Allied Products led the decliners’ log, after
dropping 9.52% to close at N34.20 on profit taking, while Mobil followed with 5.00% to close at N250.90 each
on profit taking and weak numbers.
TODAY’S OUTLOOK
As
the market opens this morning,expect mixed action of profit taking and continue
repositioning in value stocks. Investors should not panic on the recurrent
pullbacks if they have taken 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. For stocks that should be on your shopping list to buy in this up
market or pullback sign up for investdata buy & sell signal setup by
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