MARKET UPDATE FOR OCTOBER 9, 2017
VOLATILITY MAY PERSIST, AS INVESTORS, SPECULATORS POSITION FOR Q3 EARNINGS
SEASON
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TRADERS RETURN AHEAD OF SEPTEMBER INFLATION, Q3 GDP DATA
The NSE’s benchmark index had an interesting but volatile Monday. It began slightly down in the early hours of the trading session, but had a really strong rally from mid-morning to midday and by the afternoon where it hit intraday high of 36,888.73 and low of 36,320.29 points. This was the support level for the day after breaking the resistant level of 36,640.34 to close high for the day.
The market uptrend momentum continued on
the strength of price appreciation in the medium and high cap stocks as
earnings session gradually kicks off with the high expectation, especially
given that many companies have the prospect of sustaining their positive
earnings trend that would likely influence their prices, judging by the insight
of dividend possibility as revealed by the expected numbers. The positive
market breadth and high buying pressure as shown by the volume index for the
day at 1.06, while buying position was at 90% and 10% selling volume of the
day’s transaction. This trend was a continuation of previous day’s up market,
but on below average market traded volume which support uptrend as sentiments
remain positive when trading session opens this morning.
With the mature markets of the world facing
one challenge or the other, especially the U.S market that is pulling back on
the recent labour data that revealed job loss in September that was beyond
expectation, with geopolitical uncertainties that had triggered sell-offs and
cautious trading. This is expected to have positive impact on emerging markets of
which Nigeria is one. The nation’s exit from recession is a plus as market and
economic fundamentals are looking up to drive assets value in this early expansion
stage of the economy as macro-economic indices still remain positive ahead of
Q3 corporate earnings season, September inflation figure and Q3 GDP numbers.
Meanwhile, the All-Share index gained a
robust 511.00 basis points to close at 36,831.93 from an opening figure of 36,320.93 which represented a 1.41%
growth, just as market capitalisation for the day went up by N175.9bn to close
at N12.68tr, from the previous session’s N12. 5tr, also representing a 1.41%
value gained in investors’ portfolios.
The upturn in the share prices of medium
and high cap stocks like: Dangote Cement, Total, Zenith Bank, NB, Nestle, FBNH,
Guaranty Trust Bank, Dangote Flour, National Salt and Flour Mills impacted
positively on the ASI’s year-to-date return, which stood at 37.05%. This is
just as market capitalisation grew by N3.48tr within the same period,
representing a 37.11% rise above the year’s opening value.
Market breadth for the day remained positive with
the number of advancers outweighing decliners in the ratio of 27:21
on a low volume traded that was lower than previous day’s level to
continue the bull transition.
Market activities for the day, in terms of
volume and value, were down by 28.55% and 19.96% respectively to 262.17m shares
worth N3bn, from previous day’s 366.92m units valued at N3.74bn.
Transactions in the shares of Diamond, Access
and Zenith banks, as well as FBNH and Transcorp topped the volume chart.
At the close of trading on Monday, May &
Baker topped the advancers’ table, chalking 7.63% to close at N2.82 per share
on market forces and Q3 expectations, followed by International Breweries,
5.00% notch at N39.90 per share on expectation of its Q2 numbers.
On the flipside, AG Leventis dropped 4.84% to
close at N0.62 on market forces, followed by Diamond Bank that lost 4.55% to
close at N1.05 on profit taking.
TODAY’S OUTLOOK
As the market opens this morning, expect
volatility to persist owing to positioning 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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