MARKET UPDATE FOR DECEMBER 18, 2017
VOLATILITY TO CONTINUES AS INVESTORS, TRADERS
TAKE PROFIT, REPOSITION FOR 2018 EARNINGS SEASON
The nation’s stock market recorded
another decline on Monday, reversing previous session’s gains on a continued
volatility to start the trading week on a huge volume of trades driven by large
capitalized stocks, particularly the increased activity in Dangote Cement over
the past one year and six months. This should ordinary attract the attention of
discerning long-term and dividend income investors, especially as improvements
in profit level and expansion of capacity within and outside Nigeria continue. This
is a pointer to the fact that investors have seen value, considering that
institutional players and foreign investors entrance into the company.
The November inflation figure released on
Monday by the National Bureau of Statistics (NBS) was flat as expected at 15.90%,
from 15.91% in October due to relatively high price of food and other core products/services
for the period ahead of the ongoing yuletide season. Also noticeable in the
inflation data is the fact that it has been declining marginally over the past 10
months helped by the Central Bank of Nigeria’s continued intervention in the
foreign exchange segment of the inter-bank market, which has kept the impact of
imported inflation in check, despite the infrastructural problem-induced cost
of production, which had not made the decline very meaningful. This has
consolidated the positive economic data released so far that confirm the
economy is still on the path of recovery and growth that will sustain the
market volatility till 2018.
Monday’s market technicals was mixed with
breadth at its equilibrium, volume on the increased and index declining on a
selling pressure of 86% and buying volume of 14% on a volume index of 0.42 of
the total day transaction. This is outside the one cross deal involving 549.97m
shares of Dangote Cement at N225.68 each.
Trading for the day started on a losing note,
which was reversed by the mid-morning to rally and pullback to close lower
after touching intraday high of 38,486.26 and low of 37,871.65.
Meanwhile, the
composite NSE All-Share Index shed 478.12 basis points to close at 37,957.96 from
the opening 38,436.08 points, representing a 1.24% decline. Similarly, market capitalisation
was down by N170.15bn to close at N13.51tr from an opening value of N13.68tr,
representing 1.24% value loss in investors’ position.
The downturn
recorded was as a result of losses suffered by high cap stocks like Dangote
Cement, Access Bank, Zenith Bank, Flour Mills, Dangote Sugar and Stanbic IBTC.
This impacted
negatively on the year-to-date return of the All-Share index, reducing it to
41.24%, just as YTD growth in market capitalisation reduced to N4.21tr,
representing a growth of 45.63% above the year’s opening value.
Market breadth
for the day was flat as the number of decliners and advancers were equal in the
ratio of 19:19 on a huge traded volume that was higher than last Friday level.
Activities in
terms of volume and value were up by 76.86% and 1295.09% respectively to 752.11m
shares worth N127.93bn from previous day’s 425.26m units valued at N9.17bn. Transactions
were driven by activities in Dangote Cement, Guaranty Trust Bank, Zenith Bank, FBNH,
and UBA topped the volume chart.
Best performing
stocks at the end of the day’s trading were Presco and Vitafoam that topped the advancer’s log, gaining 8.81% and 5%
respectively to close at N72.00 and N2.94 each on positive market sentiments,
just as Vitafoam’s full year result is expected any moment from now. On the
other hand, Cadbury and Eterna shed 5.89% and 5.00% to close at N13.90 and
N3.99 respectively on profit taking.
TODAY’S
OUTLOOK
Ahead of today’s trading, expect volatility to
continue being the last full trading week of the year that will usher in the year
2018, as traders take profit and seek information to reposition, especially
with positive inflation figure for November. Add this to the declining interest
rate in the money market that is expected to result in more private sector
lending, just as full-year earnings season is in view. The positive outlook for
emerging markets in 2018 as a result of high commodity prices is a major
attraction as currencies of these developing markets remain relatively stable.
All of these factors begin to make much more
sense to investors when you add the undervalued nature of assets on these
exchanges.
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.
Get your home study pack on INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable. You can also still access stocks analysed in the home study pack of the INVEST 2018 traders & investors summit, which is out already.
Comprehensive training materials on
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Ambrose
Omordion
CRO | Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
CRO | Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
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