MARKET UPDATE FOR OCTOBER 10, 2017
VOLATILITY RAGES AS SMART INVESTORS ENHANCE
POSITIONS IN SELECTED STOCKS
The nation’s stock market had a generally mixed session on Tuesday. The day started out on a front and back movement of the index before selloff ensued as a result of profit booking by short-term traders that halted four trading sessions of bull-run. This profit taking is normal and should be expected in a recovering market especially when traders had recorded capital gains.
Volatility mode in the market continued ahead of more Q3 corporate earnings being released to the market in trickles, just many have announced their closed period and released board meeting notifications.
The market recorded intraday high of 36,846.77 which is becoming the new resistance level, while the day’s low was 36,747.68 points before closing the day marginally lower on a high volume. The new support level for the day was 36,747.68 as market breadth close flat.
Market momentum for the day turned weak with
selling pressure resurfacing as revealed by the volume index for the day at
1.41, while buying position was 29% and 71% selling volume. This trend halted
previous day’s up market, but on a mixed sentiments as investors are looking up
to quarterly earnings for insight of the companies full year results.
Despite the continued oscillation in crude oil price in the international market, crude oil on Tuesday was the biggest mover of the day across global markets, up almost 3%, back to the $50 per barrel level. Though oil has been oscillating around this $50 mark for some time, we've talked about the prospects for much higher oil prices. It is expected that the higher oil price will improve Nigeria’s 2017 budget implementation and her Economic Recovery & Growth Plan (ERGP) of the Federal Government which will further enhance economic and market fundamentals to drive growth and performance of companies. Also fundamentals have continued to build up in favor of much higher oil prices. We’ve seen supply drawdown for the better part of the past seven months – to the tune of more than $60 million barrels of oil taken out of the market.
Meanwhile, the NSE’s All-Share index
shed 55.33 basis points to close at 36,776.60 on Tuesday from an opening figure of 36,831.93 which represented a 0.15%
decline, just as market capitalisation for the day fell by N19.05bn to close at
N12.66tr, from the previous session’s N12.68tr, also representing 0.15% depreciation
in investors’ positions.
Downturn in the share prices of high cap
stocks like: NB, Dangote Sugar, FBNH, Guaranty Trust Bank, Stanbic IBTC, UBA,
Access Bank and Lafarge Africa impacted negatively on the ASI’s year-to-date
return, which stood at 36.85%. This is just as market capitalisation growth
year-to-date stood at N3.41tr within the same period, representing a 36.90%
rise above the year’s opening value.
Market breadth for the day was at equilibrium as
the number of advancers and decliners were equal in the ratio of
19:19 on a high volume traded that was higher than previous day’s level to
halt the bull transition.
Market activities for the day, in terms of
volume and value, were up by 34.72% and 8.67% respectively to 353.19 million shares
worth N3.26 billion, from previous day’s 262.17 million units valued at N3.00
billion.
Transactions in the shares of Diamond, Fidelity
Bank, FCMB, Guaranty Trust Bank and Zenith Bank topped the volume chart.
At the close of trading for the day, CCNN topped
the advancers’ table, chalking 10.17% to close at N9.32 per share on market
forces and Q3 expectations, followed by AXA Mansard Insurance, 5.00% notch
at N2.10 per share on expectation of its Q3 numbers.
On the flipside, C & I Leasing dropped 9.36%
to close at N1.74 on market sentiment and profit taking, followed by
Paintcom that lost 4.84% to close at N0.59 on market
forces.
TODAY’S OUTLOOK
As the market opens this morning, expect
volatility to persist owing to positioning, profit taking and earnings season
speculation that kicked off with traders returning to play the season ahead
of September inflation and Q3 GDP figure in the amidst of year-end
seasonality.
One thing that is clear in the current market
situation is that smart investors are accumulating and enhancing their
positions in selected 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.
Investing in the stock market is in phases. You must know this in
order to manage your trading and investment 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 in
this recovery market.
The workshop materials on Trading and Investing
for Financial Independence series are Available. Kindly call or send yes to
08032055467 or 08111811223.
Ambrose Omordion
CRO | Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08032055467
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