MARKET UPDATE FOR OCTOBER 19, 2017
DANGCEM, ZENITH Q3 NUMBERS INSPIRE CAUTION, AS NIGERIAN
BOURSE IN SEARCH OF DIRECTION
It was yet
another highly volatile trading session on the Nigerian Stock Exchange on
Thursday, just as activities were mixed following which the benchmark All-Share
index gyrated in a north and south movement and finally closed the day
marginally higher. There was however an improved buying pressure, despite the
low volume traded with a flat market breadth that revealed indecision on the
part of market players which slowed down the profit taking as more earnings hit
the market with impressive numbers.
The day started out with a slight movement
down to the support level in the mid-morning, before rallying at midday, as
demand for healthcare, consumer goods and banking stocks increased after Dangote
Cement and Zenith Bank released their Q3 earnings reports that beat
expectations. Dangote Cement and Zenith Bank reported Q3 Earnings Per Share (EPS)
of N11.30 and N4.11 respectively, improving from the 2016 levels of N8.13 and
N3.03 each. The market is however yet to react to these numbers which we
believe investors will do after digesting the numbers and putting the figures
in proper perspective.
Meanwhile, Nigeria’s external reserves is rising steadily, amidst the sustained intervention in the foreign exchange segment of the inter-bank market by the Central Bank of Nigeria (CBN), a situation that continues to inspire investor confidence in the economy, just as crude oil price in the international market keeps rising. This is expected to boost government revenue and enhance implementation of the 2017 budget, if the needful is done by managers of the economy. We however note the Federal Government’s decision to roll part of this year’s capital spending plan into the 2018 budget, as contained in its 2018 to 2020 Medium-Term Financing Framework to the National Assembly.
At the
close of Thursday’s trading, the All-Share Index survived by the whiskers,
barely crawling 4.13 basis points up to close at 36,645.65 from 36,641.52
points, which represented 0.01% growth. Market capitalisation similarly inched N1.43bn
up to close at N12.61tr, from the previous session’s N12.61tr, representing a
0.01% value gain.
The upturn
in the share prices of Dangote Sugar,
International Breweries, Nestle, Dangote Flour, Cadbury, GSK, Fidson, Stanbic
IBTC, Cutix, NEM and Eterna impacted
marginally on the ASI’s year-to-date
return, to move up to 36.36%, just as market capitalisation notched N3.37trillion
YTD, representing a 36.40% rise above the year’s opening value.
Market breadth for
the day was slightly flat as the number of decliners surpassed
that of advancers in the ratio of 20:19 on a volume traded that was
lower than previous day’s level to halt two trading sessions of bear
transition.
Market activities
for the day, in terms of volume and value, were down by 33.05% and 41.89%
respectively to 140.88 million shares value at N1.72 billion from the previous
day’s 198.63 million units valued at N2.94 billion
Transactions in the
shares of UBA, Sterling Bank, Guaranty Trust Bank, Zenith Bank and Skye Bank
topped the volume chart.
At the close of
Thursday’s trading, Cutix topped the advancers’ table, chalking 7.73%, to close
at N2.37 per share, as investors continue to relish its offer of 18 kobo
dividend per share, besides the activities of market forces. It was followed
by International Breweries 4.99%, which announced some progress in its
ongoing merger of sister companies in its bid to position amidst competition
for market share in the Nigerian beer, stout and malt market. Interbrew closed
at N46.52 per share, also amidst high hopes for its Q2 numbers.
On the flipside,
AXA Mansard Insurance lost 4.84% to close at N2.36 on profit taking activities,
followed by C & I Leasing, which shed 4.74% to close at N1.81 per unit on
profit booking.
Also,
during the trading session, Wema Bank and Great Nigeria Insurance made their Q3
earnings available to the market.
TODAY’S
OUTLOOK
As the market opens
this morning, volatility may continue in the midst of positioning and profit
taking, being the last trading day of the week, just as more earnings releases
are expected to hit the market.
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. 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.
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CRO | Investdata Consulting Ltd
ambrose.o@investdataonline.com
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