MARKET UPDATE FOR JUNE 22, 2017
A TIME TO EXPECT LESS SELLING PRESSURE, REMAIN IN VALUE STOCK
Nigeria stock market had a mixed session on Thursday in the
early hours of the day’s trading when there was a heavy sell-off until the
mid afternoon when it turned around to reduce the day’s losses and close lower.
It has been a mixed situation in the market this week as we have earlier
mentioned in our weekly outlook with bullish sentiment that slowed down profit
booking, coinciding with investors and traders’ reaction to the postponed
reclassification of Nigeria into the MSCI Frontier Index of emerging
market.
Thursday’s volume index
was 0.97 and buying position of 45%, while selling volume was 55% of the total
transactions for the day, against the previous day’s volume index of 0.96. Buying
volume was 8%, while selling was 92% shows that selling pressure is reducing to
give a balance market that will usher in a buying market in the nearest future.
Healthcare stocks have recently
continued to rally in the market on the strength of policy change by government
to source all the drugs and vaccines locally before looking elsewhere, a
situation that is already impacting share prices in the sector. This is expected
to grow the economy and develop the nation’s healthcare industry and reduce
pressure on the forex market.
Meanwhile, at the close of the day’s
trading session, the composite index NSEASI lost 549.45
basis points to close at 32,928.44 after opening at 33,477.89 points,
representing a 1.64% decline on huge volume traded that was slightly higher, when compared to previous day’s
transaction level. Similarly, market capitalisation for the day was down N190bn to
close at N11.39tr from an opening value of N11.58tr, representing 1.64% decline
in investors’ positions
Losses suffered in the share price of
ETI, Julius Berger, Okomu Oil, NB,Stanbic IBTC, Zenith Bank, GTBank, Lafarge
Africa, Mobil, Flourmills and 7-Up that impacted negatively on the All-Share
index’s year-to-datereturns,reducing it to 23.66%. Also, market capitalisation
for the same period stood at N2.22tr, representing a 24.30% appreciation above
the year’s opening value.
Market
breadth for the day remained negative as the number of decliners outpaced
advancers in the ratio of 45:14 on huge volume of trade to continue the two-day
down market.
Market
activities in terms of volume and value were mixed, as volume traded was up
marginally by 0.22% to 509.76m shares from previous day’s 508.73m, while value
was down by 21.41% to N5.03bn from previous day value of N6.4bn. Transactions
in the shares of UBA, DIAMOND BANK, FBNH, ZENITH BANK and TRANSCORP topped the
volume chart to close the day’s trade.
At
the end of trading, Conoil topped the advancers’ log with its share price
gaining 10.24% to close at N44.56 each on dividend of N3.10 and positive Q1
numbers that turned green from a red position. It was followed by Ashaka Cement
10.16% gain to close at N16.27per share, on market forces and expectation of
north east reconstruction by the government.
On
the flipside, May &Baker led the decliners’ log, dropping 9.62% to close at
N4.98 on profit taking, while Transcorp followed with 9.52%
to close at N1.52 each on profit taking.
TODAY’S OUTLOOK
As
the market opens this morning, expect mixed action with less selling pressure as
repositioning in value stocks continue. Investors should not panic on 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
calling 08032055467.
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