Sustained Bargain Hunting On NGSE, Amid Positioning For Year-end Rally

Market Update for December 4

The basic indicators of the Nigerian Stock Exchange (NSE) returned to green on Tuesday on the back of improved buying interests in blue-chip and banking stocks to wipe off previous day’s loss on a low traded volume.

Trading opened slightly on the down side into mid-morning before rebounding at midday to afternoon after touching intraday low of 30,792.47 basis points from its highs of 31,025.33bps. It thereafter closed the session at 31,007.27bps on a positive market breadth.

As Santa Claus and year-end rally draws closer, the resistance of further decline signals the near end of the prolonged downturn helped by buying sentiments ahead of the general elections which begins in February. The Presidential and National Assembly elections scheduled for same day will take away, or significantly reduce political uncertainties that have so far left Nigerian stocks weather-beaten, leaving them grossly undervalued, while creating entry opportunities for discerning foreign and local investors.

At this point of market volatility and correction, two kind of simple analysis for investing in stocks, seem even more relevant. First, determine what sector and companies are dominating the activity chart in terms of volume, but had suffered huge losses and nonetheless has strong earnings power/fundamental. Secondly, buy stocks in these companies and watch market trend.

Market technicals for the day were positive and mixed with lower volume traded than the previous day’s in the midst of positive market breadth and strong buying pressure as revealed by Investdata’s Daily Sentiment Report, which shows a buy volume of 92% and 8% sell position. The volume index for the day’s total transactions was 0.77.

The momentum behind the market’s performance was further weakened, as Money Flow Index dropped to 20.61bps, from previous day’s 24.79ps, indicating that funds are leaving the market despite buying interest in some stocks as investors position ahead of yearend rally

Index and Market Cap
The composite index on Tuesday gained 208.49bps, closing at 31,007.25bps after opening at 30,798.76bps, representing 0.68% growth, just as market capitalization rose by N57.34bn at N11.24 tr from an opening value of N11.24tr, representing a 0.68% 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 upturn at end of Monday’s session was driven by the 2.62% gain recorded by banking index, alongside Flourmills, Dangote Flour and Sugar that appreciated in value to impact positivelyon Year-to-Date loss which contracted to 18.92%. Market capitalization YTD decline stood at N1.94tr from its opening level in January, representing 16.89% down.

Mixed Sectors Indices
Sectorial performance indices were largely bearish, except for the NSE Banking and Insurance that closed in green, just as market breadth remained positive with advancers outnumbering decliners in the ratio of 24:14.

Market activities were down in volume and value by 4.20% and 16.86% to 198.54m shares worth N2.12bn from the previous day’s 207.24m units valued at N2.55bn. Transaction volume was boosted by financial services stocks like: FBNH,Access Bank, ETI, FCMB and Guaranty Trust Bank.

AXA Mansard Insurance and Diamond Bank were the best performing stocks, topping the advancers table, after gaining 9.89% and 9.86% respectively, closing at N2.00 and N0.78 each on low price attraction and market forces. The decliners’ side was led by Linkage Asssurance andVeritasKapital that lost 9.68% and 9.09% respectively, to close at N0.56 and N0.20 each, on 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 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.

Invest 2019 Traders & Investors Summit Holds On Saturday
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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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Date: Saturday, December 8, 2018.
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.

At the INVEST 2019 TRADERS & INVESTORS SUCCESS SUMMIT (TISS) you will discover some seldom considered aspects of investing and trading that can help you bag more big winners, while ratcheting down the number of losers in 2019 and beyond.
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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
https://investdata.com.ng/2018/12/sustained-bargain-hunting-on-ngse-amid-positioning-for-year-end-rally/