MARKET UPDATE FOR AUGUST 9, 2017
The
benchmark index of Nigeria's equity market at mid-week's trading session continued
its volatility moving slightly down at the opening session. The index later
gapped up sharply to finally breakout the 38,000 psychological line to
38,144.02 after an intra-day high of 38,186.79 and low of 37,961.43. The sharp rally is a continuation of a 4-wave
motive on seven straight days of up market with improving volume to support the
rally.
The
continued interest of domestic and international investors in the consumer
goods sector reflected on the volume of trade among the players, as their
improving fundamentals has become point of attraction. The increasing
transactions in Guinness Nigeria, Nestle and Nigerian Breweries that involved
foreign investors since the beginning of the week revealed rising participation
of smart money in the market. This is just as the nation's foreign exchange
reserve hit a two-year high of $31.22bn, helped by rising in oil prices and the
increasing foreign exchange inflows with the Naira appreciating on the back of
a relatively stable exchange rate. The nation's economy also continues to
attract direct and portfolio foreign investors arising from the Central Bank of
Nigeria (CBN) sustained intervention in the foreign exchange market which is
now awash with liquidity. This has been helped by inflows from oil companies,
banks, commodity exporters, supporting the investors and exporters' window of
the forex market.
It is
noteworthy that the Federal Government approved the medium-term framework for
2018-2020 on Wednesday based on its forecast for next year and beyond for easy
planning and early presentation of budget for approvals. Also there is the plan to refinance the
nation's domestic debt with borrowing from abroad to lower cost serving it,
thereby further quickening the recovery of Nigeria's economy from recession.
Back to the stock market, volume traded
index for yesterday was 1.02; with
buying position of 81% and selling volume, 19% of total transaction that
supported high buying pressure. Nevertheless,
profit takers are gradually cashing out.
This notwithstanding, the composite NSE All-Share index gained
144.46 basis points to close at 38,144.02, after opening at 37,999.56 points,
representing a 0.38% growth on higher volume traded when compared to that of
previous session. In the same vain, market capitalisation for the day went up
by N49.79bn to close at N13.15tr, from the opening value of N13.1tr,
representing a 0.38% value gain in investors' positions.
Price appreciation in the shares of Gunness, Nestle, 7-Up, National
Salt, Dangote Flour, Access Bank, GTBank, PZ, Nahco and Vitafoam, positively
impacted the ASI's year-to-date returns on investment, lifting it to 41.93%. Market
capitalisation over the same period improved by N4tr, representing a 42.18%
growth on the year’s opening value.
It was not all positive during the day, as market breadth turned
negative with the decliners outnumbering advancers in the ratio of 23:21 on
above-average traded volume to sustain the seven days of bull run. Trading
activities in terms of volume and value were up by 50.61% and 20.32% respectively at 328.65m shares,
worth N6.1bn, from the previous day’s 218.22m units, valued at N5.07bn.
Transactions in the shares of Jaiz Bank, FCMB, FBNH, Dangote Flour and
Access Bank topped the volume chart during the session.
At the end of trading activities also, Guinness Nigeria topped the
advancers’ table, gaining 10.23% to close at N87.95 each on market forces and
sector influenced performance. Jaiz Bank followed with a 10% gain to close at
N0.88 per share, on market forcesand improved numbers.
On the flipside, Champion Brewery led the decliners’ table after dropping 9.97%
to close at N2.53 per share on market forces. Next was Livestock that lost 5%,
closing at N0.95 per unit on profit booking.
TODAY’S OUTLOOK
As trading activities opens this morning, expect volatility to
continue as profit taking and portfolio reshuffling on the strength of Q2
numbers released recently to influence market players’ decision with attention
in consumer goods, Financial services, Agribusiness and Healthcare.
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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