MARKET UPDATE FOR JULY 27, 2017
Trading on the Nigerian Stock Exchange (NSE) on Thursday was extremely
volatile even as the bullish rampage continued as buying position increased on
daily basis as influx of earnings reports supported the uptrend momentum. This
is despite the overbought state of many technical indicators that signaled the
onset of profit taking any moment from now to allow the investing community and
analysts fully interpret the numbers to reposition their portfolios.
Thursday’s session started out with a little slide down before gapping
to the upside, making a new three-year high on the benchmark index, while some
of the sectoral indexes also made a new three-year high, reflecting an
increased level of investor confidence and liquidity in the market to close
higher at the end of the day with huge volume of trade and increased number of
advancers. The day’s volume traded index was 1.50; buying position, 98% and
selling volume, 2% of the total transaction.
On Thursday, I wrote on money
management in equity trading and investing as a key factor, especially as
interim dividend is expected from the banking stocks and a positive force for
individual stocks and the market if expectations are met. Also on Thursday, over
10 companies released their Q2 earnings reports to the market with surprises
and disappointment that should give insight into what investors should
expect from others today and Monday when the earnings reporting season
officially comes to a close, given that the news is abundant this week, with
earnings and revenue growth coming in as good as investors and traders have
seen in a long while.
Meanwhile, at the close of trading, composite index NSEAll-Share Index
gained 504.40 basis points to break into its three-year psychological line of 37,000,
closing at 37,245.77 from an opening figure of 36,740.77 points, which
represented a 1.34% growth. Also, volume transacted for the day was higher than
previous day’s, even as market capitalisation rose by N173.84bn to close at N12.84tr from the
opening value of N12.66tr, representing a 1.34% growth to enhance investors’
positions.
The upturn in the share pricesof Conoil, Nestle, Okomu Oil Palm, Presco,
GTBank, Zenith Bank, Total, Nigerian Breweries, Stanbic IBTC, UBA and Seplat
that boosted the All-Share index year-to-date returns to 38.59%. Also, market
capitalisation over the same period improved by N3.59tr, representing a 38.82%
growth on the year’s opening value.
Market breadth for day was positive as the number of advancers outweighed
decliners in the ratio of 38:17 on a huge volume of trade to continue the 16-day
bullish transition. Trading activities in terms of volume and value were upby
61.87% and 72.50% respectively at 542.8mshares worth N8.01bn, from the previous
day’s 335.34m units valued at N4.64bn.
Transactions in the shares of UBA, Zenith Bank, Diamond Bank, FBNHand
FCMB topped the volume chart to close the day’s session.
At the end of trading activities, Conoil topped the advancers’ log,
gaining 10.17% to close at N36.40 each on the back of its expected Q2 numbers.
It was followed by Champion with a 6.74% gain to close at N2.85 per share, on market
forces.
On the flipside, Cadbury led the
decliners’ log after dropping 9.68% to close at N11.20 on the back of its
unimpressive earnings report released yesterday(READ); ahead of UACN Property’s 5.46%
decline to close at N2.77 per unit on market forces and profit taking.
TODAY’S OUTLOOK
As trading opens this morning, the market is expected to continue
riding on the prospect of more Q2 numbers being released amidst countdown to
the end of this earnings season. Already, investors and traders are reacting to
the mixed numbers released yesterday, as surprising numbers are receiving
positive reactions, while treating disappointing earnings otherwise.
However, it is advisable to expect a blend of surprises and
disappointment from the companies reporting their numbers, even as investors
need not panic if any pullback occurs now due to profit booking, 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.
Get your home study pack today and
ride with the current recovery in Nigeria’s stock market and economy.
The workshop video can be viewed on
your phone, laptop and television set. The home study pack costs N20,000
including DHL delivery at your door step.
Payment should be made into Investdata Consulting Ltd, Zenith Bank
1013033032. Afterwards, kindly send payment details to 08032055467.
MR.
OMORDION AMBROSE
CHIEF
RESEARCH OFFICER
INVESTDATA
CONSULTING LIMITED
Tel:
08028164085, 08032055467
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