Sell-offs May Slowdown As Lower Prices Attract New Positioning

Market Update for July 3, 2018

It was another horrible and volatile session on the Nigerian Stock Exchange Tuesday as the market gapped down on cautious trading with the March full-year results released so far failed to impact the market as a result of mixed performance recorded, especially given the modest revenue growth by consumer goods makers.

The consumer goods are often well patronized by Nigerians, depending on their disposable income, thereby providing a good gauge of the health status of the nation’s manufacturing sector. It thereby confirms the prevailing narrative suggestive of a slowdown in the Federal Government’s economic recovery efforts as signaled by the Q1 GDP data, a situation that may likely worsen in the Q2 when the data is published by the National Bureau of Statistics (NBS). This situation has further been reflected in the marginal increase in the recently released June PMI data.

Consequently, the possibility of most corporate earnings beating expectations and impacting the market much is very slim, considering the low economic activities and the delayed 2018 budget that was signed into law in the last week of the quarter. Add this to the fact that implementation is yet to commence at a time electioneering activities for the 2019 general election is soon to be flagged off, beginning with the Ekiti gubernatorial elections slated for July 14, 2018, to be followed later in the year by that of neighbouring Osun.

NSE Index plunged all-day and the fall was particular steep between midday to afternoon when it made lower lows to follow through the previous day’s pattern, touching intraday lows of 37601.79 basis points, from a high of 37,946.92bps, following which it remained below the shortest moving average of 37,606.23bps. The market at this point looks good to go for the kill, however, many investors are waiting to identify the bottom before jumping in, because of the huge losses they suffered before now.

Tuesday’s market technicals  were negative as traded volume was low in the midst of negative market breadth and sentiments, as indicated by Investdata’s Daily Sentiment Report showing a ‘sell’ pressure of 99% and ‘buy’ volume of 1% on a volume index of 0.76 of the day’s total transactions.

At the end of the session, the momentum behind the market’s performance were weak, despite inching up as reflected on the money flow index at 22.26 points from the previous day’s 24.06 points, an indication that there is a slowdown in funds leaving the market.

Index and Market Cap                                     

The benchmark index for the session lost 341.80bps, closing at 37,606.23bps, after opening at 37,946.92bps, representing a 0.90% decline on a low volume that was slightly higher than the previous day’s. Similarly, market capitalisation dropped by N123.81bn to close N13.62tr from an opening value of N13.75tr representing 0.90% depreciation in value.

If you are hunting for the right stocks to buy on this oscillating trend, join Investdata Buy & Sell Signal setup. We have a watchlist of stocks for different investment purposes that you may position in, as the market sets for another phrase of recovery. To register and become a member send Yes or stocks to the phones numbers below. Our watch list has increased due to the prolonged correction before now, take advantage of this service to buy right and sell right.

The day’s downturn was due to huge losses recorded by highly capitalized stocks like Nestle, Dangote Cement, 11 Plc, Guaranty Trust Bank, Zenith Bank, Lafarge Africa, Fidelity Bank, Honeywell, UBA, Forte Oil, Oando, Dangote Sugar and Cadbury. These impacted negatively on the NSE’s Year-to-Date return, pushing it further down to 1.67%, while market capitalisation gain for the period stood at N8bn, a 0.23% rise above the year’s opening value, on the impact of new listings earlier in the year.

Bearish Sector Performance

Sectorial performance remained bearish for the day, except for the NSE Insurance that was slightly up, while the NSE Oil/Gas, Industrial, Banking and Consumer goods were down. Market breadth was negative as decliners outweighed advancers in the ratio of 30:13 to continue its two-day down market.

Market activities were up in volume and value by 0.45% and 42.38% respectively to 257.39m shares worth N2.65bn, from the previous day’s 256.23m units valued at N1.86bn. The day’s volume was boosted by trading in financial services and industrial stocks like Multiverse, Zenith Bank, Guaranty Trust Bank, Access Bank and FBNH that witnessed increased trading to top the activity chart.

The best performing stocks for the day were Prestige Assurance and Royal Exchange Assurance   that topped the advancers’ table, with 9.43% and 9.09% respectively to close at N0.58 and N0.36 each, due to market forces.

On the flip side, Jaiz Bank and Omoluabi Micro Finance Bank were the worst performing, losing 10.00% and 9.86% each to close at N0.63 and N0.64 on market forces

Market Outlook

We expect the sell-offs to slowdown as lower prices attracts new positioning ,while volatility continue ahead of Q2 earnings season since equities remain undervalued with higher yields. Investors should review their position in line with their investment goals and take action as events as it unfolds in the global and domestic environment.

However, we would like to reiterate our advice that investors should go for equities with intrinsic value, especially during this season were less earnings are released ahead of march full year earnings release and Q2 interim dividend payment  are expected in the market arena very soon.

We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

Save The Date: Investdata Stock Market Training Workshop

                                 On Saturday, July 28, 2018



Theme- Comprehensive Stock Trading & Investing Toolkit for Rest of 2018

Sub Topics

Review of 2018H1 Market & Economic Performance:  How Fiscal Reforms and Stimulus Will Support the Market/Economy in 2018H2.

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2018H2 Trading Checklist: How to Find Winning Stocks in Nigeria’s Volatile Equity Market

After the prolonged correction, volatility is here to stay for the rest of 2018. Is it time to start worrying about losses suffered so far, a flattening yield curve or time to relax due to the outstanding earnings season? Better yet, is there a way to harness increased volatility to your advantage? Our facilitator, a stock market expert will show you how to handle increased volatility in 2018. He’ll offer insights into forces impacting today’s market. He will share, using real-time examples, his ultimate checklist to finding winning stocks propelled by volatility. This simple strategy allows you to quickly evaluate stocks and to better time entry and exit points, while understanding market forces moving your portfolio

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Recent and ongoing changes in market volatility present both risks and opportunities for discerning traders. Learn some of the most effective strategies for taking advantage of the high-probability trading opportunities available in equities, while minimizing risks associated with stock market trading. The six most powerful patterns in the market to trade, how to know which patterns and strategies to specialize in for consistent results and the critical difference between oscillating and momentum patterns.

Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Ambrose Omordion

CRO|Investdata Consulting Ltd
info@investdataonline.com
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