The Nigeria equity market had a strong gap up to start the week strong on Monday. The day started off with a bang as the share prices rose sharply, with the index running hard in the morning hours to cross the psychological line of 34,000 and remained up, touching a new high at 34,146.51 to close the day on high transaction volume. Volume index stood at 0.92 on a buying position of 97%, while selling volume was 3% of the total volume traded for the day.
The Presidency and its economic team at the end of public presentation of 2017 budget also on Monday said the administration is ready to release an initial N350bn of the N2.36tr earmarked for capital project for the year to Federal Government Ministries, Departments and Agencies (MDAs), to kick start the implementation of the year’s budget. This is good but considering the delayed passage and signing of the budget and the fact that implementation is likely to commence in the second half of the year, the N350bn may be too small to make the needed impact at this point to support the Central Bank of Nigeria (CBN) monetary policy and intervention to induce the needed recovery of the nation’s economy.
Meanwhile, stock markets around the world were mixed to close Monday higher, despite the seeming over supply of oil, while at the same time resisting further decline of price and political crisis amidst last week’s major decisions by central banks. Stocks still managed to close higher especially as U.S President Donald Trump meets CEO’s of tech companies. At the same time, the Fed’s continues to justify the rates hike as it watches other economic data that support and confirm the economic strength of the world’s largest economy.
Back home, the composite index NSEASI gained 324.54 basis points to close at 34,135.10, after opening at 33,810.56 points, representing a 0.96% growth on a high volume traded. It was however marginally lower when compared to previous day’s transaction level. Similarly, market capitalisation for the day was up by N112.08bn to close at N11.80tr, from an opening value of N11.69tr, representing 0.97% value gained.
Price appreciation in the shares of Total, Nigerian Breweries, Julius Berger, Guaranty Trust Bank, UBA, Lafarge Africa, Dangote Cement, Stanbic IBTC, Presco and Flour Mills impacted positively on the All-Share index, raising its year-to-date return to 26.72%. Also, growth in market capitalisation for the same period stood at N2.44tr, representing a 27.35% gain above the year’s opening value.
Market breadth for the day remained positive as the number of advancers outpaced decliners in the ratio of 28:19 on high volume of trade to continue the four straight days of bull-run.
Market activities in terms of volume and value were mixed as traded volume was down by 2.17% to 482.52m shares from previous day’s 493.24m, while value was N5.68bn. Transactions in the shares of WEMA BANK, GUARANTY TRUST BANK, ACCESS BANK, FIDELITY BANK and TRANSCORP topped the volume chart to close the day’s trade.
At the end of trading, CCNN topped the advancers’ log with its share price gaining 10.17% to close at N9.75 each, on expectation of the impact of the planned reconstruction of the nation’s insurgency ravaged North East geo-political zone, among others. It was followed by May & Baker’s 9.87% gain to close at N5.01 per share, on continued impact of the Memorandum of Understanding (MoU) with the government to produce vaccine market forces.
On the flipside, Chemical & Allied Products led the decliners’ log, after dropping 9.52% to close at N34.20 on profit taking, while Mobil followed with 5.00% to close at N250.90 each on profit taking and weak numbers.
As the market opens this morning, expect mixed action of profit taking and continue repositioning in value stocks. Investors should not panic on the recurrent pullbacks if they have taken position based on strong numbers and future prospects of any stock.
Again, we advise that investors allow numbers to guide their decisions to reposition for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of recovery economic fundamentals, if the numbers will support the price reversal or continuation.
It is time to use your technical tools to take decision by knowing the support and resistant level to reposition or exit any position.
Once more, at the risk of repeating oneself, we must reiterate that industry potential is very important when picking a stock, because there are factors that are sector-specific and would naturally impact positively or negatively on companies operating within such an industry, especially now that the economy is recovering. For stocks that should be on your shopping list to buy in this up market or pullback sign up for investdata buy & sell signal setup by calling 08032055467.
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Workshop on COMPREHENSIVE SHORT-TERM TRADING STRATGIES FOR REST OF THE YEAR & BEYOND
- The Toolbox of Successful Traders & Technical Analysts- Mr Meshach Ukpoma, FX Analyst/Trader
- Outlook and Implications of the 2017 Budget & Petroleum Industry Governance Bill (PIGB) on Nigeria’s Stock Market and Economy- Abiola Rasaq, Group Head Investor Relations, UBA
- A Strategic Outlook; The Fusion of Fundamental & Technical Analysis- Ambrose Omordion, Chief Research Officer Investdata Consulting Ltd
- Understanding Market Timing to Manage Risk, Using Technical Analysis – Mr. Abdul-Rasheed Momoh, Head, Capital Markets, TRW Stockbrokers Limited
The workshop holds on:
DATE: 15 July 2017
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.
The fee is N20, 000 per participant. Payment made a week before the date of the event attracts 10% discount. Companies sending more than two representatives would enjoy a 15% discount. Payment should be made into: Zenith Bank; Account Name: InvestData Consulting Limited; Account Number: 1013033032.
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- OMORDION AMBROSE
CHIEF RESEARCH OFFICER
INVESTDATA CONSULTING LIMITED