MARKET UPDATE FOR AUGUST 10, 2017
The Nigerian stock market on Thursday
succumbed to selling pressure as profit takers cashed out their gains from the
recent bull-run to halt the month-to-date seven-day rally. This is expected in
any recovering market, because profit booking is is an integral part of
equities trading.
During the session, the benchmark
Nigerian Stock Exchange (NSE) All-Share index and other sectorial indexes gapped
down slightly in the early hour of the session and then struggled to rebound. It however came down again at
midday, before finishing the day lower on a high volume traded as banking and petroleum marketing stocks
suffered pullbacks, a situation that has made these sectors more attractive for
taking position as portfolio reshuffling continues. This is especially the
situation, considering that results of interim dividend paying banking stocks
started hitting the market, beginning with Zenith Bank's half-year audited
scorecard which beat market and analysts' expectations.
Also the likely rebound of crude oil may
impact the oil companies that are into crude lifting business.
As the market looks forward to more
positive economic data like the inflation figure for July, which likely to
follow the five-month trend of gradual but steady decline. There is also the
second quarter GDP that will confirm the real health status of the Nigerian
economy as regard the recovery so far from recession which started last year.
This data are expected to add impetus to the positive sentiment for the market
and the economy at large.
Back to the stock market, volume traded
index for yesterday was 1.03; with buying position of 45% and selling volume,
55% of total transaction that supported selling pressure as mentioned in our
review on Thursday that profit takers are gradually cashing out. But reversal
is imminent as more earnings reports from the interim dividend paying stocks
are expected.
Meanwhile, the composite NSE All-Share index shed 41.17basis points to
close at 38,102.85, after opening at 37,144.02 points, representing a 0.11%
drop on higher volume traded when compared to that of previous session. In the
same vain, market capitalisation for the day fell by N14.19bn to close at
N13.13bn, from the opening value of N13.15bn, representing a 0.11% value loss
as investors’ took profit.
The downturn was impacted by losses suffered by medium and high cap
stocks like Forte Oil, National Salt, Total Nigeria, Oando, Dangote Sugar,Zenith
Bank, Ecobank Transnational Incorporated, Access Bank and Gauranty Trust Bank.
The drop expectedly influenced the ASI's
year-to-date return negatively, reducing it to 41.78%, just as market capitalisation
over the same period improved by N3.9bn, representing a 42.07% growth on the
year’s opening value.
Market breadth for the day remained negative with the decliners
outnumbering advancers in the ratio of 27:20 on a high volume to halt the seven-day
up market. Trading activities in terms of volume and value were mixed. While
volume was up by 10.53% to 362.67m shares, from the previous day’s 328.65m
units,value was marginally down by 8.2% to
N5.6bn from the previous day's N6.1bn.
Transactions in the shares of Access Bank, Zenith Bank, FCMB, Diamond
Bank and Guaranty Trust Bank topped the volume chart during the session.
At the end of trading activities, Unilever Nigeria topped the
advancers’ table, gaining 5% to close at N43.05 each on market forces and
impressive Q2 numbers. BOC Gas followed with a 4.94% gain to close at N3.61 per
share on market forces.
On the flipside, Forte Oil led the decliners’ table after dropping
9.71% to close at N53.76 per share on profit taking; ahead of petroleum
products marketing sector peer- Oandowhich lost 5%, closing at N7.22 per unit
on profit booking.
TODAY’S OUTLOOK
As trading activities open this morning, expect volatility to continue
as profit taking and portfolio reshuffling on the strength of Q2 numbers released
recently. Dangote Sugar's share price will be adjusted today for the 50 kobo
interim dividend, while market reaction to Zenith Bank's impressive numbers,
particularly the offer of 25 kobo interim dividend from its N2.40 earnings per
share is expected to continue.
However, investors need not panic if any pullback occurs now due to
profit booking if they take position based on strong numbers and future
prospects of any stock as improving economic fundamentals will have positive
impact on the companies’ scorecards if the recovery move to growth.
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, market timing are 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. Market is in phases know it in order to manage your trading and
investing risk. 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 on 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 or
08111811223.
MR.
OMORDION AMBROSE
CHIEF
RESEARCH OFFICER
INVESTDATA
CONSULTING LIMITED
Tel:
08028164085, 08032055467
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