NSE INDICATORS REACT TO FASTER GDP GROWTH, INVESTORS UPBEAT ON MPC OUTCOME

Market Update for November 20

The nation’s stock market had a mixed and volatile session on Monday as it recovered from the seeming effects of the downgrade-induced pullback with the help of more positive economic data, particularly the nation’s Q3 GDP that came in a better than expected at 1.4%, helped by the robust growth in the oil sector, which begins to make more sense when considered vis-à-vis all other positive macro-economic indices like inflation which had in the last nine months grown slower to berth at 15.91% in the month of October. The improved GDP growth did not come as a surprise to many analysts and keen watchers of the Nigerian economy, judging from the marked improvement over the period of key indicators like the Purchasing Managers’ Index (PMI)that has consistently stayed above 50 points over the past seven months, hitting 55 point in October, consumer confidence index had moved up in the last three quarters to 67.48% at the end of Q3, just as corporate earnings have so far remained positive in the three quarters so far, of 2017, beating market and analysts’ expectations. 

These factors are pointers to what investors should expect of stock prices as the market and economic fundamentals continue to improve, supporting expansion and productivity as reflected in the Q3 GDP data released by the National Bureau of Statistics (NBS)on Monday. This is a foretaste of what should be expected in 2018 if the monetary authorities continue to review strategies, while the fiscal authorities step up their game with more stimulus packages for critical sectors like the value chains in power, transportation, manufacturing and agricultural sectors to create more job opportunities, while enhancing the earnings power of the people thereby improving their living standards and in the process supporting growth and sustainable productive activities. 

Trading for the day and week started out with a little move to the upside, after which it slid down. By late morning and near midday, the index hit the session’s lows at 36,599.99. In the afternoon, it rebounded to continue rallying as more medium and high cap stocks appreciated in value to touch intraday high of 36,800.85 which at the end of the day closed in positive territory to maintain three days of up market as investors and traders await the outcome of the two-day Monetary Policy Committee (MPC)which ends on Tuesday. 

Market technicals for Monday was positive but weak on low volume despite the high buying pressure of 96%, with volume index for the day at 0.69and selling position at 4% of the total transactions on Monday. This is a signal that market recovery is gaining momentum as the NSE All-Share index is crossing its 20-Day moving average with money flow still looking up on a daily time frame, which suggests that investors can still hold their position despite the expected short-term profit taking from gains of the last few days.  

Meanwhile, the benchmark index gained 89.02 basis points to close at 36,792.60 from the 36,703.58 points it opened, which represented a 0.24% growth, just as market capitalisation notched N30.98bn to close at N12.81tr from the previous N12.77tr, representing a 0.24% value gain in investors’ position.

The upturn recorded during the day was as a result of  price appreciation in medium and high cap stocks like Zenith Bank,UBA, FBNH, PZ, Dangote Sugar, Nascon and  Dangote Flour that impacted the ASI’s year-to-date returnto 36.90%, just as YTD growth in market capitalisation stood at N3.56tr, representing a 38.48% rise above the year’s opening value.

Market breadth for the day was positive as the number of advancers outnumbered decliners in the ratio of 17:15 on a low traded volume that was lower than last week Friday’s.

Market activities in terms of volume and value were down by 88.58% and 61.13% respectively to 208.71mshares valued at N2.45bn from the previous day’s 1.83bnunits, worth N6.31bn.

At the end of Monday’s trading session, PZ Cusson topped the advancers’ chart, gaining 10.23% to close at N24.79per share, on market forces, followed by National Salt which notched 9.59% to close at N15.89 on market sentiment and its impressive Q3 numbers.

On the flipside, Forte Oilshed a further 9.73% to close at N43.89 on profit taking and the probable impact of its exit from MSCI index, ahead of Law Union& Rock Insurance, which lost 4.62% to close at N0.62 each on market forces.

TODAY’S OUTLOOK

As the market look forward to the outcome of the MPC meeting on Tuesday, expect volatility to continue due to profit booking, portfolio rebalancing and repositioning along the earnings surprises and positive economic data that are pointing to where the economy is headed at the end of the year, especially with the Q3 GDP growth of 1.4%. 

Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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Sub Topics

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The new strategies to trade and invest in a transforming market will be revealed to boost players profit and minimized losses by Alhaji Garba Kurfi, a chartered accountant, Fellow CIS   and Managing Director of APT Securities & Funds Limited. He will also tell participants about classes of stocks to focus on, in this new market normal value of 1kobo in 2018.

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The summit holds on December 9, 2017 at Ostra Hall & Hotel, Behind M.K.O Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Time is 9:00am. The fee is N25,000 per participant. Payment made on or before December 1, 2017 attracts 10% discount. Companies sending more than two representatives would enjoy 15% discount. Those who have participated in our previous seminars and workshops will enjoy 15% discount.  Payment should be made into Investdata Consulting Limited; Zenith Bank Acct. No: 1013033032 or UBA, Acct. No: 1020288683.

To register for the coming summit Kindly visit our site www.investdataonline.com OR www.investdata.com.ng also you can call or send yes to 08032055467, 08111811223 or 08179547605

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Best regards

Ambrose Omordion
CRO | Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
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Tel: 08028164085, 08032055467