Investors Speculate Ahead Of Economic Data, Next Week’s MPC Outcome

Market Update for November 13
Nigerian stock market on Tuesday recorded a marginal gain, halting two previous sessions of losses on a seeming improved volume of trades driven by the huge interest in Ikeja Hotels, which resulted in N2.05 sell volume, as well as continued speculative trading in banking and industrial goods stocks that impacted the market positively.

The prevailing volatility and indecision in the market continued as the volume of trade remains small, besides low transactions that reflects the general mood of selloffs amidst repositioning in other stocks while interpretation of Q3 numbers continue ahead of the release of 2018 full-year financials.
The NSE All-Share Index opened the day on a flat note, but moved up and down in the mid-morning till midday as bargain hunters took advantage of low prices to position in some stocks that helped the index to touch intraday highs of 32,402.92 basis points, from a low of 32,101.80bps. It however pulled back at the last minutes, but closed above the day’s opening level at 32,153.90bps on negative sentiment.

The prolonged pullback in emerging markets due to the high yield environments in developed economies, after the more than triple the interest rate hike over a short period of time however had ripple effects including the trade war already manifesting in corporate earnings coming below market expectations in developed markets. Consequently, there is the high possibility of redirecting investments into emerging market, knowing that sovereign debts in these markets are low, with Price-to-Earnings ratio below its five-year low, given the recent pullbacks in oil price currently trading below $70 per barrel. This is likely to influence the U.S to slowdown rate hike as the economic growth remained strong.

Back to Nigeria, one thing that is clear from the equity market’s slowdown, is the bigger the pullback, the higher the possibility of a bull-run in the near term, with stocks like: UACN, PZ, GSK, Julius Berger, Lafarge Africa and Diamond Bank hitting their 10-year low. Also important to note is the fact that many stocks selling below 50 kobo continue to dominate the topped advancers table since the onset of selloffs by smart money. With the elections coming closer still, and the equity becoming cheaper, the possibility a return by foreign investors who had exited earlier, before the elections proper, or after is high.

This and more reasons are why you should attend INVEST 2019 where expert resource persons will guide you on how to take position well before the signs become clear to the majority, by following tell-tale signs.

Market technicals on Tuesday were positive but weak as volume traded was high, in the midst of negative market breadth and strong sell pressure as revealed by Investdata’s Daily Sentiment Report, with sell position at 83% and buy volume of 17%. The volume index for the day’s total transactions was 1.69.
The momentum behind the day’s market performance was up as speculative activities were on banking and industrial goods stocks. Money flow index for the session fell to 58.71bps, from previous day’s 47.59ps, indicating that funds are entering some stocks in the market.

Index and Market Cap
The composite index gained marginal 9.49bps, closing at 32,153.90bps, after opening at 32,153.41bps, representing 0.03% growth, just as market capitalization inched up by N3.52bn, closing at N11.74tr from an opening value of N11.73tr, representing 0.03% value gain.

Attention: join Investdata buy and sell signal setup to get all our in-depths analysis on the picture and to get access to our carefully created watch list. To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. The number of stocks on our watchlist has increased due to the prolonged market correction. Take advantage of this service to buy right and sell right.
The day’s slight upturn was influenced by price appreciation in medium and high cap stocks like: Zenith Bank, UBA, Flourmills, Stanbic IBTC,Oando, Access Bank, Unity BANK and Dangote Flour. This impacted the Year-to-Date returns, which slightly reduced its loss level to 15.92%, while decline in market capitalization reduced to N1.87tr year-to-date, representing 13.73% drop.

Mixed Sectors Indices
Sectorial performance was largely bearish, except for the NSE Banking and Industrial Goods which closed green, while market breadth was negative with decliners outnumbering advancers in the ratio of 26:16, halting two sessions of bear run.
Market activities were up in volume and value by 181.3% and 44.10% respectively to 399.76m shares worth N2.24bn, from the previous day’s 142.11m units valued at N1.57bn.

Transaction volume was boosted by financial and hospitality service stocks: Ikeja Hotel, FBNH, Diamond Bank, FCMB and UBA.
The best performing stocks were Unity Bank and GSK, which gained 9.85% and 9.55% respectively to close at N0.78 and N12.05 each on market forces.
On the flip side, C/I Leasing and Lasaco Assurance lost 10% each to close at N2.52 and N0.27 respectively on profit taking and market forces

Market Outlook
As equity prices are becoming cheaper oscillating trend will continue as traders speculate ahead of October inflation report, given that there is no new incentive for the market in November, except for next week’s 264th meeting of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting on Monday and Tuesday, unless and until there is a change in the narrative. Going by the timetable of the National Bureau of Statistics (NBS) released earlier in the year, the nation’s Q3 Gross Domestic Product (GDP) report is slated for release on Tuesday, November 27, same date as the Q3 capital importation report.

The ongoing volatility will persist as Q3 numbers assist investors and fund managers rebalance their portfolios, while watching the political space and ahead of the expected Q3 GDP and full year company earnings position. These are likely to drive prices north, or south, while determining market direction before or after Presidential Election.
Investors should review their positions in line with investment goals, strength of the company numbers and act as events unfold in the global and domestic environment.

However, we would like to reiterate our advice that investors should go for equities with intrinsic value,
We advise investors to allow numbers guide their decisions while repositioning in any stock, especially now that stock prices remain volatile amidst mixed company, economic and market fundamental.

Attention! Attention!! Attention!!!
Invest 2019 Traders & Investors Summit
Theme: Best Returns In 2019 & Beyond: Adopting The Billionaire Mentality In Stock Selection
Sub-Topic
1. Pre-election year performance Review and post-election Investing opportunities
2. Simple Strategies for picking undervalued stocks With Fundamental & Technical Tools
3. Psychology of Equities Trading For Managing Positions & Money
4. Mastering Market Dynamics & Dividend Techniques To Grow Your Income in 2019
5. Picking the Right Stocks to Retire Rich In Financial Independence
6. Nigeria’s Post Election Economy & 2019 Sectoral Analysis
7. Understanding the big picture of Budget Delay & Its Implication on the Economy/Stock Market

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Time: 10a.m.

The huge decline in stocks from its January 2018 peak has not necessarily been due to the fundamentals of quoted companies, but investors flight for safety over uncertainties arising from next year’s general elections, participants will learn from experts/facilitators at the workshop, how and where to position for juiciest returns, depending on investment horizon.

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In today’s equity market, there is wisdom in being able to identify ‘buy’ opportunities very early and sell for maximum returns, while minimizing loss in any market situation.Understanding the dynamics of the stock market during any cycle is the very key to successful trading and investing. For this to happen,we must arm ourselves with knowing the essential driving forces behind the market as they move up and down.

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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
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