Impact of Seasons, Historical Events On Equity Investment

The changing political landscape at a time of dwindling economic fundamentals pose recurring challenges to Nigeria’s equity market since the last pre-election year in 2014, due to policy instability and implementation style of government’s economic policies.

The table below shows that the NSE All-Share index closed negative in the pre-election year that ushered in the fourth republic democracy (in 1999), as a result of the lack of confidence, of amidst doubts about there will truly be handover to civilian government.
The years after have however closed positive as confidence was restored, political stability, improved liquidity and confidence that had supported the market during the period. But in 2014, despite the seeming strong economy, the heightened political risk, insecurity, division in political parties led to massive defections that deflated investor confidence, as many sought solace in safe havens.

This trend has resurfaced in 2018 due to many factors ranging from the high interest in developed markets, lack of economic policy direction, insecurity, dwindling economic activities, heighten political risk, continued defection and lack of transparency in the political environment.

Pre-Election Years Market Trend & Performance
1998 TO 2018

The prevailing economic indices and falling market fundamentals are also pointing more to bear market in the remain days of 2018 until there is improved economic condition and statistics to reverse the trend.

The table below shows the first month trading performance in post-presidential elections and inauguration movement of the composite index in the last two decades.
Post-Presidential Election Rally, First Trading month Performance in (20 Years)

From the above table, it is clear that the market’s performance post presidential elections have had positive impacts when the incumbent is re-elected. This trend of first month of the post-election performance has reflected the risk level associated with elections, given that government remains the major driver of economic reforms, besides being the biggest spender in the country.

The one step forward and three steps backward has not helped the nation record appreciable progress since May 2015, coupled with its unclear economic policy, at a time enormous time has been committed to fighting corruption at the expense of the economy and with national output dwindling, companies are closing down and unemployment rate rising, should be a source of concern to this government. The Federal Government must therefore find ways to fix the economy. The investing public has suffered huge losses since 2015 as the market continued to oscillate and make lower lows.

The tables above show the NSE’s performance at different periods. We therefore need to know how to take advantage of these various seasons, patterns and cycles to take position in good stocks. This is part of what our team of experts will discuss at the INVEST 2019 TRADERS & INVESTORS SUCCESS SUMMIT holding December 8, 2018.

Invest 2018 Edition Was Strictly On When To Exit Position and Hold Cash.
It is unfortunate that many investors and traders were carried away with the unprecedented rally recorded in the first month of 2018 when the benchmark index broke out the 43,000 psychological line that was strictly set for investors and traders to selloff their position. Also, the expected 2017 full year earnings reports was one reason many held on, while smart money was exiting at the time seemingly naïve investors were entering the market to position for dividend. Failure to keep to instructions on the part of many caused them to loss all profits recorded in the first three month after the summit held December 9, 2017.

The 2019 edition of the annual Investdata event holding on December 8, 2018 presents opportunities for Traders and Investors to buy right and position for the coming year, looking at the current economic and market fundamentals as a basis for forecasting what the coming year holds for investors and investments opportunities before and after the 2019 general elections.

At the 2017 edition, the attention of participants was drawn to 15 “STOCKS TO WATCH” and are likely honey-pots in this ongoing year at a time the market was still looking up before the prolonged downturn hits the market. Investors are now eagerly seeking knowledge and strategies to recoup their huge losses by positioning right at the right time.
Those who attended the summit would remember the following 15 recommended stocks:

The table above highlights the performance of each of the said 15 RECOMMENDED STOCKS between Friday, December 8, 2017 and March 29, 2018, before the free fall that kept the market in a bearish mode for over 10 months. This is also due to political risks associated with the 2019 elections and dwindling economic activities that have many stocks to hit their 52-week lows and others 10 to 11 years low. This has created buy opportunities and revealed high possibility of bullish ascendancy that is imminent, as investors will be positioning for 2018 full year earnings reporting season for dividend and capital appreciation, if the numbers beat market expectation.

We advise that traders and investors should target good companies with sound fundamentals that have the earnings capability to pay dividend. This is the time to effectively combine technical and fundamental analysis for successful investment decisions.

https://investdata.com.ng/2018/11/impact-of-seasons-historical-events-on-equity-investment/