MARKET UPDATE FOR WEEK ENDED SEPT 22 AND OUTLOOK FOR 25-29, 2017
EQUITY INVESTORS LOOK TO MPC OUTCOME AHEAD OF MONTH, YEAR-END
PORTFOLIO REBALANCING
Trading activities on the Nigerian Stock
Exchange in the past week remained highly volatile and mixed but closed higher
on improved technicals that supported Friday’s breakout of the downtrend line
to confirm the very short term rally that would continue this week, depending
however on the outcome of the two-day meeting of the Central Bank of Nigeria
(CBN) Monetary Policy Committee (MPC) which ends on Tuesday.
The index on a weekly time frame is still
relatively weak since it is still trading below its downtrend line, but
signaled a breakout on improved volume that indicates increasing buying
pressure ahead of third quarter’s end and Q3 earnings season in October, which
also would indicate how traders are repositioning for end of the year trading
activities.
The improvement in market breadth after turning
positive in the last two trading session has strengthened market technicals
with relatively high volume that confirms recovery on mixed sentiments. There
is noticeable increased buying pressure that shows a gradual return of
speculators who are determined to play the year’s remaining earnings season, which
is likely to support uptrend reversal in no distant time. This would
however depend on the ability of the monetary and fiscal authorities to take
actions capable of sustaining the fragile economic growth recorded in Q2,
beginning with the outcome of the MPC meeting, which analysts, in any case, expected
would support what the CBN had done so far to drive the recovery that brought
about the positive GDP in Q2 2017.
However, month and quarter-end window dressing
by fund managers may influence prices.
The volume index for the period under review was
0.72, with buying position at 100% and 0% selling volume of the total
transaction as volatility continued. The composite NSE All Share Index gained
483.24 points to close at 35,488.81points on Friday, from an opening figure of
35,005.57 points, representing a 1.38% growth on a high volume of transactions.
The index hit an intra-week high of 35,490.84 and low of 34,729.78 before
retracing to close above the psychological line of 35,000.
Similarly, market capitalisation for the period
closed higher at N12.23tr from an opening value of N12.07tr, representing a
1.37% value gained in investors’ portfolios to reduce losses suffered recently.
Top performing stocks that dominated the advancers log for the
week were low caps while few highly capitalized stocks that had pulled back
before now are attracting attention on the strength of their strong fundamentals
and expected third quarter earnings reports.
The upturn experienced during the period is attributable to
gradual speculative activities of traders, especially with the third quarter earnings
season around the corner, as they reposition in medium and high cap stocks,
thereby lifting the NSEASI’s year-to-date return to 32.05%, just as market
capitalisation for the period increased to N2.99tr, representing a 32.31% gain
from the year’s opening value.
Market breadth was however negative as the decliners outnumbering
advancers in the ratio of 35:25 on a high volume of trades that reflect
investors’ repositioning ahead of portfolio rebalancing ahead of Q3 season by fund
managers.
The Nigerian stock market went the way of markets across the world
to close higher over the past week, despite another around of panic created by
sanctions imposed on North Korea over its recent missile launch by the UN,
worsened by the war of words between Pyongyang and Washington. There was a strengthening
of the U.S Dollar after the Feds meeting during the period left interest rate
unchanged, which resulted in the breakout of oil price above $50 per barrel,
amidst geopolitical security threats that seem to be a concern for investors.
This is also especially as central banks around the globe are coming out with
different monetary tighten measures.
Japan’s Nikkei, Germany‘s DAX, Britain’s FTSE 100 and U.S market
indexes closed north, despite the Feds’ warnings of a likely increase in rates
once more by year end, irrespective of low the prevailing inflation rates. The
central banks also warned that it would reduce its $4.2tr balance sheet, citing
low unemployment, business investment growth and economic expansion. However,
inflation remains a key concern among investors and central bank officials.
In Europe, the highly watched IHS Mar-kit survey found that
economic activity rose to a four month high in September, which could spur the
ECB to take action on ease of QE.
In Asia, S&P Global Ratings downgraded China’s sovereign
credit rating, amidst worries that credit growth continues to move too quickly,
despite efforts to curb lending activities.
Back home, the composite NSE Index opened the week on a
negative note, losing 0.38% which continued on the second trading session with
marginal loss of 0.08%, before reversing at the midweek’s trading when it
chalked 1.04%. This was however short-lived, as the indicators closed south
again the following day, with a marginal loss of 0.05%. On Friday, the
indicators recorded a relatively bigger gain of 0.85%, bringing total gained for
the week to 1.38%, thereby halting previous week’s down market.
The All-Share Index and sectoral indices for the period also
closed higher, except for the NSE Consumer Goods and NSE Oil/Gas that faced the
opposite directions, losing 0.23% and 3.05% respectively, while NSE AseM was
flat to close the week.
The week’s activities, measured by aggregate volume and value,
were up by 22.68% and 16.20% respectively, as investors crossed 1.10bn shares
worth N17.86bn, as against previous week’s 896.62m units valued at N15.37bn in
the previous week.
At the end of the week’s trading, Linkage Assurance
topped the advancers’ table, gaining 11.86% to close at N0.66 per share on the
back of market forces, followed by Continental Reinsurance’s 9.79% notch to
close at N1.57each on market forces and expectations for its Q3 numbers. The
decliners’ table on the other hand was led by Nigeria Enamelware, which closed 16.65%
lower at N23.23 on price adjustment for bonus of one ordinary share for
every five held. Caverton followed with
a 9.17% drop to close at N1.09 per share on profit taking.
During the week also, Union Bank notified the
exchange of its rights issue that opened, while Avon Crowncaps voluntarily
delisted from the exchange.
Market Outlook
Technically, Nigeria’s stock market is still
searching for direction, despite the improved technicals last week, until a
breakout of the downtrend line, which confirms recovery.
The volatility in the market is expected to
continue as trading opens this week, amidst profit taking and repositioning
ahead of MPC meeting decision on Tuesday, third quarter end, Q3 earnings
season and year-end activities. We still hope that the Nigerian government would
review its 2017 budget implementation strategy and put in place some fiscal
measures that can help sustain the ongoing economic recovery to help drive down
inflation numbers faster.
Investdata believes the Muhammadu Buhari administration should improve the living conditions of Nigerians by tackling the huge infrastructure deficit to enhance economic development.
One thing that is clear in the current market
situation is that smart investors are using the ongoing correction to
accumulate and enhance their positions in some stocks.
Again, we advise that investors allow numbers to
guide their decisions while repositioning for the rest of the year 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, Plan to attend the Independent Day
Free Investment Education Summit jointly organized by APT Securities &
Funds Ltd/Investdata Consulting Ltd, because real independent is financial
freedom.
Theme: PROFITABLE STOCK MARKET TRADING STRATEGIES FOR FINANCIAL INDEPENDENCE AND FREEDOM
Have you traded the stock market before and
failed? It is a known fact that about 90% of people who trade without knowledge
and understanding of the dynamics will end up losing 90% of their capital most
of the time.
You don’t have to be one of
them. Therefore, when you attend this Independent Day Free Investment
Education Summit this seminar and learn how to trade such that you could be one
of the lucky 10%, who manage to consistently play the market profitable by
themselves through our online portal from your phone and laptop anywhere in the
world. Consistency is the key to equity trading and investing successfully.
At APT Securities and InvestData we have been
teaching investors simple and proven strategies which when implemented makes
you a successful trader and investor in any market conduction, especially when
it comes to equipping them well enough to know how to protect their portfolios
and profit from market correction in a recovering economy and market.
We have also, over time, focused attention on
attuning the mindset of investors and traders to managing risk, while
eliminating emotions when trading so as to avoid irrational investment
decisions.
Attend the Independent Day Free Investment
Education Summit and our team of expert and time-tested resource persons will
show you how you too can successfully and confidently trade and invest in
stocks profitably on your own from your phone, laptop and/or desktop computer.
The workshop
holds on:
DATE: October 2.
2017
TIME: 10am –
2.00pm
VENUE: Ostra
Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD,
Alausa, Ikeja. Lagos.
What you will learn at this the
Independent Day free workshop:
1. The fundamentals of stock trading and
investing
2. Trading and investing strategies that will
help you manage your risk, protect your capital and profit from market
correction.
3. How to trade on your own online, using the
APT eTrade platform on your phone and laptop.
4. The psychology of trading and investing and
how it will make you successful.
Registration is
free
There will be
sales of stock trading and investing materials for further understanding at the
end of the workshop, Fundamental and Technical Analysis materials, including
home study packs you can play and viewed on your
phone, laptop and television set, all at 20% discount for attending. You need
to prepare yourself and profit from the market and the recovery economy to
truly achieve your financial independence and freedom.
For more
enquiries about the programme, please call 08028164085, 08034053018 and
08111811223
Ambrose Omordion
CRO | Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08032055467
Comments
Post a Comment