NSE IN A DILEMMA AS THE BENCHMARK INDEX HIT NEW 52 WEEKS HIGH

The nation’s equity market is again in a dicey situation that calls for cautious trading, as the Nigerian Stock Exchange (NSE) composite All Share Index broke-out the 2016 strong resistant level of 31,071.25 basis points on a huge volume of trade to attain a new 52-week high of 31,371.63,reflecting the strong demand for stocks. This has expectedly pushed some equity prices above their 52-week, two, three, four years and even five-year highs to reveal the level momentum currently running in the market.

From the above graph, you would discover that the index had formed a cup that not only supports, but confirms a reversal from the previous down trend the market experienced before now to this uptrend that shows recovery after three years of down markets.

A breakout of the rising channel will take the market to psychological line of 33,000 before pullback, despite the expected time to time profit taking. As the week’s trading activities ended on Friday, we observed some remarkable market activities driven by improving liquidity helped by the increase in percentage of funds pension fund administrators can invest from their pool in the equity market from 20 to 30%. It should be noted that this pool of funds are targeted at companies that are leaders in their sectors and have met set selection criteria, even as the Nigerian economy is poised to recover soon from recession.

Other factors include the stability and gradual appreciation in the value of the Naira at the various segments of the foreign exchange market on the strength of sustained intervention by the Central Bank of Nigeria (CBN), low market price to earnings in Africa.

Meanwhile, stocks on Nigeria’s course are attaining new record highs by the day, despite the fact that oil is under $50 and fiscal policies that are expected to propel economic environment that will boost activities and confidence, is being delay as 2017 budget.

The nation’s financial market trend is looking up consistently on strong company fundamentals and data that support the imminent recovery of macro-economic indices on sustained improvements in liquidity at the forex market driven by the CBN’s sustained supply. Also, the equity market continues to draw support from these realities, enhanced by pension fund managers who are positioning in fundamentally sound Nigerian stocks in the MSCI Frontier markets index.

Being blue-chips and high cap stocks, any price movement recorded by them would make significant impact on the general market direction.

Stocks that have so far attained new 52-week highs at the close of Friday’s trading and their closing prices are:

i.                     FBNHoldings              N6.42

ii.                   Nestle                          N918.76

iii.                  Zenith Bank                N19.99

iv.                 Stanbic IBTC               N27.00

v.                   Learn Africa                N0.88

vi.                 Fidson                          N2.42

vii.                Eterna                          N3.90

viii.              Newrest ASL               N4.48

ix.                 Dangote Sugar            N7.45

x.                   Beta Glass                  N53.23

Equities with their prices at a three-year high by Friday are:

i.                     UBA                          N8.40

ii.                   Access Bank              N8.93

iii.                  May& Baker             N1.79

Those with Four-year highs are:

i.                     Okomu Oil               N55.00

ii.                   Continental Re          N1.29

Meanwhile, stocks on the Nigerian bourse at their five-year highs are:

i.                     Presco                       N54.00

ii.                   GTBank                     N34.00

iii.                  NPFMFB                   N1.40   

If you are in these stocks should you be selling or holding?

This is one reason you should be at the oncoming INVESTDATA COMPREHENSIVE STOCK MARKET TRADING AND INVESTING WORKSHOP where you would learn from financial and market experts how to combine fundamental and technical analysis to ensure you buy or sell at the right prices guided by technical analysis only. 

INVESTDATA CONSULTING LIMITED

Email: ambroseconsultants@yahoo.com, investdatng@gmail.com

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