MARKET UPDATE FOR OCTOBER 3, 2017
INDICATORS REMAIN NEGATIVE, VOLATILE, AS
INVESTORS AWAIT ONSET OF Q3 EARNINGS SEASON
The day’s activities opened with the composite NSE All Share index slightly in the green, running back and forth before settling at 35,262.26, after touching an intraday high of 35,475.59 as selling pressure resumed in some medium and high cap stocks around the mid-afternoon. The index however bounced back towards the close of trading, thereby reducing the sell-off, as buying positions in financial services sector stocks increased to close the sector’s index on the positive side.
Market traded volume was very high with a stronger selling pressure as revealed by the volume index for the day standing at 2.61, while buying position was at 21% and 79% selling volume of the day’s transaction.
All things considered, INVESTDATA see no compelling need yet for investors or traders to panic from the reading of Tuesday’s trading statistics, given that this is a fresh month that just opened on a negative note. The reason is not far-fetched, considering the market’s Price-to- Earnings ratio is still relatively low on the average and therefore attractive with the economic fundamentals improving and expected to positively impact most of the companies listed in one way or another, both directly and indirectly, and in the process, reflect on the market at large. There is also the factor that we would not hurry to forget- the strong liquidity in the foreign exchange segment of the Nigerian inter-bank market which has and will continue to help sustain relative stability in exchange rates. This is responsible for the Naira appreciation in the value of the Naira, even if marginally, against other foreign currencies, driven by availability of forex particularly in the investors and exporter window of the market as the Central Bank of Nigeria (CBN) continues keeping its promise to intervene by injecting more funds on a weekly basis. On Tuesday too, the apex bank injected another $195m into the market (READ).
Directors of PZ Cussons (READ) and Infinity Finance kicked off the 2017 third
quarter earnings report season by making available their first and third
quarter results respectively to the market on Tuesday. It would be noticed from
the summary of the PZ result presented that the loss sustained reduced by a
significant 92%, helped by the drop in foreign exchange loss from N4.701bn
to N1.793bn, a situation that does not require a divination before it can be
linked to the availability of forex at considerably stable rate occasioned by
the CBN intervention programme that began in April this year, a period covered
by PZ’s Q1 report under consideration.
Investors and traders should however note that as more primary market activities unfold in form
of right issues in the market ahead of 2017 year end, there is a likelihood that
the current volatility already being experienced in the market would be prolonged,
going forward as oil price continues to rally at the same time there is a relatively
stable exchange rate regime that has supported the market.
Meanwhile, at the end of Tuesday’s
trading, the All Share Index shed 133.89 basis points to close at 35,306.09
from an opening figure of 35,439.98 which represented 0.38% decline, just as
market capitalisation for the day was down by N45.69bn to close at N12.17tr, from
the previous session’s N12.22tr, representing a 0.38% value loss in investors’
portfolios.
The downturn in the share prices of
medium and highly capitalized stocks like Dangote Cement, Forte Oil, Nigerian
Breweries, Ecobank Transnational Incorporated, Oando, Access Bank and Nestle impacted
negatively on the ASI’s year-to-date, cutting it to 31.37%, just as market
capitalisation growth stood at N2.92tr, representing 31.62% above the year’s
opening value.
Market breadth for the day was negative as the
number of decliners outnumbered advancers in the ratio of 22:18 on
a very high volume traded that was higher than previous day’s level to
halt the bull transition.
Market activities in terms of volume and value
were up by 168.98% and 51.06% respectively to 634.33m shares worth N5.79bn, as
against the previous day’s 235.82m units valued at N3.83bn recorded in the
previous session.
Transactions in the shares of FCMB, FBN Holdings,
Guaranty Trust Bank, Zenith Bank and United Capital topped the volume chart.
At the close of the day’s trading, C&I
Leasing topped the advancers’ table, chalking 9.82% to close at N1.79 per share
on market sentiment, followed by Learn Africa’s 6.76% notch at N0.79
per share on market forces. On the flipside, Unity Bank lost 5.00% to close at N0.57
on profit taking, followed by PZ Cussons which shed 4.98% to close at N24.23
per unit on price adjustment and weak Q1 results released during the session.
TODAY’S OUTLOOK
As the market opens this morning, expect
volatility to persist owing to portfolio repositioning ahead of earnings season’s
onset, just as year-end activities continue.
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. 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
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