The equity market on Thursday had another mixed session, as it extended its gaining momentum to consolidate a three-day rally on high transaction volume.
The session started out with the indicators moving slightly downward and thereafter the index had a strong surge back by afternoon to cross another 1000 point threshold to 37,135.23 basis points. The gain came on the back the rebound in some equity prices to their three-year new highs on the strength of improvements in their recently released Q2 numbers that surpassed market and analysts’ estimates.
Interim dividend expectations in banking stocks that are yet to release their half year scorecards have kept transactions in these stocks high, with investors and traders positioning ahead of announcement of their numbers. The statement interest is fueled by the fact that all of the banks with history of interim dividend payment have sent their Q2 audited accounts for approval by the Central Bank of Nigeria (CBN) before they are presented to the investing community through the Nigerian Stock Exchange (NSE).
Meanwhile, in a bid to further boost the import and export window of the FX market, the CBN has introduced screen display of exchange rates to attract more green back, while the phone trading is still in use. This is to further compliment the apex bank’s effort at exchange rate convergence in the nation to a single exchange rate. Already, the gap between the black market and official exchange rate is close.
Meanwhile, investors and analysts are expecting government to fashion complimentary fiscal policy measures that will quicken economic recovery and further attract foreign echange inflows in the form of direct or portfolio investments.
Thursday’s volume traded index was 1.05; with buying position of 100% and selling volume, 0% of total transaction that revealed more buying pressure which support the lingering up market. This is especially as portfolio rebalancing continues based on companies improving fundamentals as shown in their earnings reports so far in this current financial year.
Meanwhile, the composite NSE All-Share Index gained 230.17 basis points to close at 37,135.23bp, breakout the psychological line of 37,000 after opening at 36,905.06 points. This represented a 0.62% growth on a higher volume traded when compared to the previous sessions, even as market capitalisation rose by N79.33bn to close at N12.8tr, from the opening value of N12.72tr that represented a 0.62% appreciation in investors trading positions.
The upturn in the share prices of medium and high cap stocks impacted the All-Share index year-to-date returns to 38.18%. Also, market capitalisation over the same period improved by N3.52tr, representing a 38.58% growth on the year’s opening value.
Market breadth for day still remained positive as the number of advancers outnumbered decliners in the ratio of 25:17 on a high volume of trades to extend the three-day bull rally. Trading activities in terms of volume and value were up by 64.18% and 25% respectively at 412.12m shares worth N4.72bn, from the previous day’s 251.01m units, valued at N3.78bn.
Transactions in the shares of Livestock Feeds, Access Bank,Guaranty Trust Bank, Transcorp and Zenith Bank topped the volume chart during the session.
At the end of trading activities also, Dangote Sugar topped the advancers’ table, gaining 9.80% to close at N14.00 each on impressive Q2 numbers and the 50 kobo interim dividend. It was followed by C & I Leasing with a 9.09% gain to close at N0.98per share, on market forces.
On the flipside, Cutix led the decliners’ table after dropping 5.00% to close at N2.09 per share on market forces and profit taking, followed by NPF Microfinance that lost 4.76% at N1.20 per unit also on profit taking.
As trading opens this morning, expect profit taking by traders being the last trading day of the week as the mixed reaction to the Q2 numbers released recently continues.
However, investors need not panic if any pullback occurs now due to profit booking, after taking position based on strong numbers and future prospects of any stock.
Again, we advise that investors allow numbers to guide their decisions while repositioning for the rest of the year’s trading activities, especially now that prices of stocks are looking up ahead of the improving 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.
Be reminded once more that industry potential, market timing are 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. Market is in phases know it in order to manage your trading and investing risk.