MARKET UPDATE FOR JULY 11, 2017

MIXED PERFORMANCE AHEAD ON NSE AS PEAK OF EARNINGS SEASON BECKONS

Nigeria stock market on Tuesday had an interesting and volatile day as the indices came down at the opening of trading session to hold support at 32,546.08 point before retracing to intraday high of 32,910.31, closing the day’s trading higher on above average market volume before the recent rally that changed the face of the market that made the volume traded low looking at the transaction volumes that supported price appreciation during last two month daily trade. The uptrend has broken out the first resistant level at 32,770.59 since its bottomed out after forming the double bottom chart pattern on the 5^TH July 2017 to extend the bull transition that is driven by banking stocks as investors and traders take last minutes position on half year dividend paying stocks with Q2 numbers already underway.

The possibility of the trend continuing today is high with expectation of inflation figure for June to hit 15.46 or lower from analysts and economic watcher, ahead of positive Q2 numbers, despite the mixed performance from investment banking company- United Capital released after trading hours yesterday. Traders in Ucap are likely to bail out this morning which will push the price down after net profit dropped, despite a relative earnings rise.

With the planned meeting of the Senate, management of the Central Bank of Nigeria (CBN) and managing directors of banks to proffer solutions to the high interest rate that will further boost the nation’s economic recovery.If at the end of the day something tangible comes out of the meeting even as the apex bank continues its intervention in the foreign exchange market  as to drive the positive economic data and news that will attract local and international investors.    

The global stock markets is becoming dicey at this point as the rate environment is widening as  rate hike and exit of Quantitative Easing is spreading  when US Dollar is weakening with oil price oscillating and looking for direction. Today the world is waiting for the Fed briefing of the congress.   

Meanwhile, the benchmark index  gained 213.38basis points up to close at 32,827.98 after opening at 32,614.60 points, representing a 0.65% growth on above average  volume traded that was higher than previous day’s trades. Similarly, market capitalisation went up by N73.55bnto close at N11.31tr from an opening value of N11.24tr, representing a 0.65% value gained in investors positions. 

The upturn in highly capitalised stocks impacted positively on the All-Share index, to further boost its year-to-date return to 22.15%. Also, market capitalisation over the same period improved by N2.07tr, representing a 22.36% gain above the year’s opening value.

Market breadth for the day was positive as the number of advancers outnumbered decliners in the ratio of 25:21 on a better volume of trade to continue the four-day bull-run.

Market activities in terms of volume and value were up by 20.05% and 3.83% respectively   to 218.76mshares from the previous day’s 182.07mand N2.11bnfrom N2.47bn. 

Transactions in the shares of UBA, NIGER INSURANCE, ZENITH BANK, DIAMOND BANK and FCMB topped the volume chart to close the day’s trade.

At the end of the day’s trading, Neimeth topped the advancers’ table with its share price gaining 9.37% to close at N0.70 each, on market forces, followed by Vitafoam with a 5.45% gain to close at N2.71 per share, on market forces and expectation of Q3 numbers. 

On the flipside, UBN led the decliners’ table after dropping 6.27% to close at N5.23 each on profit taking by investors, followed by Presco with 4.99% to close at N64.54on profit taking. 

TODAY’S OUTLOOK

As the market opens this morning, expect mixed performance, against the backdrop of the fact that more companies are expected to release their numbers to continue the earnings reporting season. Investors should not panic on the pullbacks if they have taken position based on strong numbers and future prospects of any stock, but fix their gaze on the actual numbers and bail out when expectations are not met, thereby cut loss. 

Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of the improving 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 oscillating market or pullbacks.  Sign up for investdata buy & sell signal setup by calling 08032055467.

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Countdown to COMPREHENSIVE SHORT-TERM TRADING STRATGIES FOR REST OF THE YEAR & BEYOND 

Sub Topics:

1. The Toolbox of Successful Traders & Technical Analysts- Mr Meshach Ukpoma, FX Analyst/Trader

2. Outlook and Implications of the 2017 Budget & Petroleum Industry Governance Bill (PIGB) on Nigeria’s Stock Market and Economy- Abiola Rasaq, Group Head Investor Relations, UBA

3. A Strategic Outlook; The Fusion of Fundamental & Technical Analysis- Ambrose Omordion, Chief Research Officer Investdata Consulting Ltd

4. Understanding Market Timing to Manage Risk, Using Technical Analysis - Mr. Abdul-Rasheed Momoh, Head, Capital Markets, TRW Stockbrokers Limited

The workshop holds on:

DATE: 15 July 2017

TIME: 9.00am 

VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos. 

The fee is N20, 000 per participant. Payment made a week before the date of the event attracts 10% discount. Companies sending more than two representatives would enjoy a 15% discount.  Payment should be made into: Zenith Bank; Account Name: InvestData Consulting Limited; Account Number: 1013033032. 

For more enquiries about the programme, please call 08032055467, 08179547605, and 08111811223   

MR. OMORDION AMBROSE

CHIEF RESEARCH OFFICER

INVESTDATA CONSULTING LIMITED

ambroseconsultants@yahoo.com

Phone 08028164085, 08032055467