MARKET UPDATE FOR JULY 24, 2017

NSE INDICATORS HIT NEW HIGHS, RETURN 28.94% YTD ON LOW, MEDIUM CAP GAINS

·        As N’East Reconstruction Agenda Set To Boost Building Material Stocks

Monday’s trading session was a very good on the Nigerian Stock Exchange (NSE), kick-starting the last full trading week in the Q2 earnings reporting season, as the uptrend momentum continued 13-day bull-run on a higher magnitude of gains, especially as highly capitalized stocks appreciated in value amidst expectations of positive Q2 numbers from quoted companies.

Already, the earnings season has entered high gear with Transnational Corporation of Nigeria (Transcorp) and Nahco presenting half-year unaudited results that beat market expectations during the day’s trading session. Investors and traders, especially participants at INVESTDATA CONSULTING’s Comprehensive Short Term Trading Strategies Workshop a fortnight ago which dwelled on the Fusion of Fundamental & Technical Analysis in picking value stocks for the rest of the year and beyond, are already in value stocks and now recording gains.

Investor’s positive sentiments for banking stocks continued, ahead of their earnings reports as demand for the interim dividend paying bank stocks increased, following which most of them finished Monday’s trading on high bid.

The demand for building material stocks also were in high demand as impressive numbers had started emanating from the sector, which expectation of better numbers in Dangote Cement has pushed its share price to two year high on a strong volume.

In the months to come, stocks in the building materials sector could become the toast of investors, given plans by the Federal Government to begin the reconstruction of the insurgency-ravaged area, particularly Borno, Yobe and Adamawa, after almost a decade of supremacy battle between the Boko Haram insurgents and Federal troops. The plan has been tagged: THE BAMA INITIATIVE.

Back to the NSE, Monday’s volume traded index was 0.80. Buying position was 95% and selling volume, 5% of the total transaction. The NSE banking and Industrial indexes closed in green, while the NSE Consumer and Insurance indexes were red, as traders continue booking profit from the resent rally in these sectors to position in other industries and stocks with possibility of paying interim dividend.

Meanwhile, the composite index NSEASI gained 632.15 basis points yesterday to hit a two-year high, while closing at 34,652.52 from an opening figure of  34,020.37 points, representing a 1.86% growth on low transaction volume that was lower than previous day’s. Similarly, market capitalisation rose by N217.87bn from the opening value of N11.75tr, representing a 1.86% growth in the worth of investor’s portfolio.

The upturn in share prices of low, medium and high cap stocks impacted the All-Share index to boost year-to-date returns to 28.94%. Also, market capitalisation over the same period improved by N2.7tr, representing a 29.16% growth over the year’s opening value.

Market breadth for Monday was flat,as the number of advancers outnumbered decliners in the ratio of 21:20 on a low volume of trade. Market activities in terms of volume and value were down by 22.35% and 22.75% respectively at 293.75m shares worth N3.95bn, from the previous day’s 378.19m units valued at N5.11bn.

Transactions in the shares of Access Bank, UBA, Guaranty Trust Bank, UnityKap and Transcorp topped the volume chart to close the day’s session.

At the end of the trading activities, Transcorp topped the advancers’ log, gaining 8.05% to close at N1.61 each on the back of its impressive Q2 numbers and brighter prospects. It was followed by Dangote Cement  with a 5% gain to close at N222.60 per share, on  expectation of better Q2 numbers and impact of government infrastructural development  on the it sector.

On the flipside, Aiicoled the decliners’ log after dropping 5% to close at N0.57on profit taking activities of investors and traders, ahead of Vitafoam’s 4.85% decline to close at N2.53per unit on market forces.

TODAY’S OUTLOOK

As trading opens this morning, expect mixed performance as market ride on release of more Q2 numbers as the season enter high gear with positive earnings. However, it is advisable to expect a blend of surprises and disappointment from the companies reporting their numbers, even as investors need not panic due to the pullbacks if they have taken position based on strong numbers and future prospects of any stock. You should therefore fix your gaze on the actual numbers and bail out when expectations are not met, thereby cutting their 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.

Be reminded once more 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 to INVESTDATA BUY AND SELL signal setup by calling 08032055467.

Meanwhile, we say a very big THANK YOU to all participants that made the INVESTDATA workshop a huge success, even as stocks recommended during the workshop continue to rally and activities in the various sectors identified as those to invest in this second half of 2017 are looking up and promising to lead the rest of the year in performance and returns.

To book for the WORKSHOP VIDEO and SOFT COPIES of WORKSHOP MATERIALS send YES to 08028164085 and 08111811223.

MR. OMORDION AMBROSE

CHIEF RESEARCH OFFICER

INVESTDATA CONSULTING LIMITED

ambroseconsultants@yahoo.com

Phone 08028164085, 08032055467