MARKET UPDATE FOR SEPTEMBER 12, 2017



SELLING PRESSURE PERSISTS ON NIGERIAN BOURSE, AS INVESTORS POSITION IN GTBANK, NB

Trading on the Nigerian Stock Exchange (NSE) on Tuesday closed lower; extending a three-day bearish consolidation as the index broke down its rising channel to touch the recent strong support level at 35,397.52 and in the process formed a double bottom that supports reversal if sentiment turns positive as market opens this morning.  The non-implementation of 2017 budget before now by the government and the style of disbursing funds is poor after such a long time of waiting which has slowed the economic recovery. This largely accounts for the strident doubts Nigerians have continued to express over the recent Q2 GDP data released by the National Bureau of Statistics (NBS) that Nigeria’s economy was out of recession, at 0.55% even as it noted that the growth recorded was yet fragile.

Also, Nigerian pollster- NOIPOLLS published the outcome of a survey report on Tuesday showing that 75% of manufacturers lamented the unholy combination of disincentives such as the high foreign exchange rate amidst the disparity, bad roads, and poor access to credit and weak demand. These, they say continue to affect their operations negatively, a situation blamed on government’s failure to implement its budget in line with its being the highest spender in any economy, especially while funding infrastructural development, thereby driving growth. With just three months to the end this fiscal year, there seems no clear policy direction that would support the growth recorded in the second quarter GDP. This is a source of concern for investors at a time like this, especially with the continued decline in the exchange rate, which would have been worse, but for the ongoing intervention of the Central Bank of Nigeria (CBN).

Also, for some time now, the market has remained volatile, amidst the persisting and even high selling pressure as investors continue cashing out to meet needs associated with this (tuition fees) season as schools reopen for the new session both globally. Nonetheless, smart investors are taking this opportunity to buy ahead of Q3 earnings season and year-end. 
Despite the ongoing correction in the market, foreign investors crossed a million shares of Nigerian Breweries at N181 and N183; and 28m units of Guaranty Trust Bank at N37.80 each. 
Selling pressure however continued as revealed by the volume index of 1.29, with a buying position of 11% while selling volume was 89% of the day’s total transaction to support the down market.
Meanwhile, the All Share Index shed 267.42 basis points to close at 35,397.52 from the 35,664.94 points opening level which represented a 0.75% decline, just as market capitalisation for the day fell by a further N92.17bn to close at N12.2tr, from N12.29tr in the previous session, representing a 0.75% value loss to continue the three day down market.

The downturn was driven by losses suffered by high cap stocks during the day’s trading that impacted negatively to further reduce  the All-Share Index’s year-to-date returns to 31.71%, just as rise in market capitalization YTD fell to N3tr, representing a 31.94% rise above the year’s opening value.
Market breadth for the day remained negative as the number of decliners outpaced advancers in the ratio of 28:18 on a high volume of trades to sustain bear transition.
Market activities in terms of volume and value were up by 225.44% and 165.39% respectively to 359.35m shares, as against the previous day’s 114.77m units, valued at N5.77bn from the N2.17bn recorded in the previous session.

Transaction in the shares of Diamond Bank, Guaranty Trust Bank, Zenith Bank, FBNH and Meyer topped the volume chart.
At the close of Tuesday’s trading session, International brewery topped the advancers’ log with a 6.83% gain to close at N38.00 per share on market forces; followed by NEM Insurance with a 5% notch at N1.05 per share on a positive market sentiment.  
On the flipside, Aiico lost 6.78% to close at N0.55 on market forces and profit taking, followed by Flourmills that shed 5% to close at N27.55 per unit on profit taking. 

TODAY’S OUTLOOK
Technically, the market so far is weak, on a high volatility that is  likely to continue this morning as trading opens until speculators return, with traders likely to remain on the fence, amidst profit booking and repositioning in hope that the positive macro-economic indices will drive optimism in equity investments ahead of Q3 earnings season and year-end. We expect the Nigerian government to review its 2017 budget implementation strategy and put in place some fiscal measures that will help the monetary authorities sustain the ongoing economic recovery as shown by the positive but fragile GDP, to make growth and development a reality.
However, investors need not panic if they take position based on strong numbers and future prospects of any stock as smart investors are using this correction to accumulate and increase their positions in some stocks.

Again, we advise that investors allow numbers to guide their decisions while re-positioning for the rest of the year’s trading activities, especially now that prices of stocks are looking down amidst improving economic and market fundamentals. It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.

Meanwhile, 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. By investing and trading knowledgeable

The workshop video is available and it 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.

Ambrose Omordion
CRO | Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08032055467

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