NGSE Index Resists Further Decline, As Money Flow Rises Ahead Of Santa Claus Rally

Market Update for December 5

At the end of midweek’s trading on the Nigerian Stock Exchange, the composite All-Share index resisted further decline, closing higher on strong buying sentiment and flat market breadth. Does this signal near or end of the worst performance on the Nigerian Stock Exchange that had suffered almost 30% loss from its peak in January this year?

With many listed stocks on NSE recording new 52-week low in recent times after bourse shed almost 5% in the month of November to create more attractive entry points for bargain hunters and discerning investors ahead of year end rally. Investdata research has shown that market performance in the month of December for the last five year has closed in the green with average rally of 2.8%.

With the economic data so far released in this last quarter of 2018 looking up to suggest that the festive period had triggered economic activities which is reflecting in November’s Purchasing Managing Index released recently by Central Bank of Nigeria (CBN) at 57.9, up from 56.80 in October.

Midweek’s market technicals were positive as volume traded was slightly higher than previous day’s as market breadth remained positive with strong buying pressure as revealed by Investdata’s Daily Sentiment Report, which shows a buy volume of 89% and 11% sell position. The volume index for the day’s total transactions was 0.77.

The energy behind the market’s performance was strengthened, as Money Flow Index rose to 26.21bps, from previous day’s 20.62ps, indicating that funds are entering the market and some stocks, irrespective of the prevailing low liquidity

Index and Market Cap
At the end of the session, the NSE-ASI gained 144.43bps, closing at 31,151.68bps after opening at 31,007.25bps, representing 0.47% growth, just as market capitalization climbed N52.73bn up at N11.37tr from an opening value of N11.34tr, representing a 0.47% appreciation in value.

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 uptrend was impacted by price appreciation in stocks like: Dangote Cement, Dangote Flour, PZ, Flourmill, Oando, Wema Bank, Diamond Bank, Transcorp and FBNH, reducing the Year-to-Date loss to 18.54%. Market capitalization YTD decline reduced to N2.24tr from its opening level in January, representing 16.43% down.

Mixed Sectors Indices
Sectorial performance indices were largely bearish, except for the NSE Industrial and Insurance that closed higher, just as market breadth remained positive with advancers outnumbering decliners in the ratio of 19:18.

Market activities were up in volume and value by 0.29% and 8.96% as 198.64m shares changed hands for N2.31bn from the previous day’s 198.54m units valued at N2.12bn. Transaction volume was boosted by financial services stocks like: FBNH, Access Bank, Diamond, FCMB and Guaranty Trust Bank.

Veritas Kapital and Diamond Bank were the best performing stocks, topping the advancers table, after gaining 10% and 8.97% respectively, closing at N0.22 and N0.83 each on low price attraction and market forces. The decliners’ side was led by CCNN and Transnation-wide Express which lost 9.72% and 9.23% respectively, to close at N16.25 and N0.59 each, on market taking and market forces .

Market Outlook
We expect sustained bargain hunting and portfolio repositioning for year-end to shape performance of the market ahead of Santa Claus rally, as number of companies hitting new 52-week low are on the increased to reflect undervalue state of the market.
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 the Presidential Election.

Investors should review their positions in line with their 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 low in the midst of weak company, economic and market fundamentals.

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CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
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Tel: 08028164085, 08032055467
https://investdata.com.ng/2018/12/ngse-index-resists-further-decline-as-money-flow-rises-ahead-of-santa-claus-rally/