MARKET UPDATE FOR DECEMBER 7, 2017

NIGERIA’S NSE REMAINS VOLATILE, AMIDST PROFIT TAKING, FUND MANAGERS CONTINUE ACCUMULATION

The stock market had another positive session on Thursday as the bull rampage extend to its seven straight trading day of up market. This came with an increased volume of trades to confirm the era of sustained confidence in the entire market and indeed the recovery in the Nigerian, as investors and analysts begin to appreciate the Q3 numbers from quoted companies and expectations for the earnings season, all of which are supporting the price movement. These and more are factors that must be playing out among foreign and institutional investors as they seek to balance their positions on the back of the recent review of the MSCI Frontier Market index, resulting in the improved forex inflow already seen.

Added to these are the 2018 full year earnings reporting season in view, amidst the surge of positive  economic data pointing to brighter future that is capable of supporting further movements of equity prices.

We must however not lose sight of the fact that all of the blue chips, consumer goods and banking stocks have so far rallied and their technicals improved,which could attract some profit taking, which should not be unexpected after the market has rallied for seven consecutive days.

Meanwhile, Thursday’s trading started out with a little pop to the upside, then a pullback, which was retested, and when that was successful, the NSE All-Share index extended to another session highs between midday to afternoon, hitting a strong intraday high of 39,623.52 basis from opening low of 39,075.30 and then closed the day higher on positive market breadth.

The market breaking out of another resistance level of 39,341.50 ushered more stocks to their new 52-week highs which was supported by improving liquidity given the renewed confidence occasioned by the nation’s rising external reserve and low stock valuation in the market. 

Market  volume index for Thursday stood at 2.20, with buying pressure of 84% and selling volume, 16% of the total transaction to keep the bull-run, despite the mixed  sentiments that reflected in some stocks that succumbed to profit taking pressure.  

Meanwhile, the composite NSEASI gained 458.84 basis points to close at 39,534.14, from the 39,075.30 points, representing a 1.17% growth, just as market capitalisation appreciated by N159.8bn to close at N13.77tr from previous day’s N13.61tr, representing a 1.17% value gain. The sustained uptrend result from price appreciation in low, medium and high cap stocks that impacted positively on the ASI’s year-to-date returns, pushing up to 47.11%, just as YTD growth in market capitalisation galloped to N4.52tr, representing a 48.90% rise over the year’s opening value.

Market breadth for the day remained positive as the number of advancers out paced decliners in the ratio of 28:17on a high traded volume that was higher than previous day’s level. 

Transactions in terms of volume and value were up by 50.16% and 39.18% respectively to 1.06 billion shares worth N10.16bn from previous day’s 703.68m units valued at N7.3bn. The day’s activity was driven exclusively by banking industry stocks: FCMB, UBA, FBNH, Zenith Bank and Fidelity Bank,which topped the volume chart.

At the end trading, UBN and Fidelity Bank topped the advancers table, gaining 10.11% and 7.65% respectively to close at N7.19 and N2.42 on positive market forces.

On the flipside, Total Nigeria shed 5% to close at N228.01 each on market forces and  profit taking, ahead of AXA Mansard’s 4.65% loss to close at N2.05 each, on market forces.

TODAY’S OUTLOOK

Being the last trading day of the week, market volatility will continue as traders take profit from the ongoing rally, while at the same time institutional investors continue their accumulation of shares ahead of year-end and Santa Claus season amidst improving and positive economic data, and in view of 2018 full year earnings reporting season.

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 today and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable
Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available (Home Study Pack), you can play and watch on your mobile phone, laptop, desktop and Tv. Kindly call or send yes to 08032055467 or 08111811223.

Ambrose Omordion
CRO | Investdata Consulting Ltd
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