Brent Crude Oil May Fall Fast Again!!!

By TRW Stockbroker Research,

Will 2020 FGN budget target price of US$57/bbl for Brent crude oil be broken this time ?

We think ‘YES’ in the intermediate-term, why?….Brent crude oil is almost completing a contracting triangle since 4Q2018 and once completed, we expect a strong impulsive bearish wave falling far below US$57/bbl.

Already smart commodity investors are selling off their Brent positions and this is evident in the starting of a potential 3rd wave on our Brent Crude Oil Short-Term Forecaster as shown in the attachment….Brent Oil RNVI Chart-wk-4-2020.xps

The next question is….how will FPIs react to a potential sudden sharp fall in Brent Crude Oil on the CBN OMO-bills market?….this, in our opinion, will be the defining moment on the Nigerian financial markets in 2020.

NSE Pricelist for Jan 22, 2020

TRW_STOCKBROKERS_stxpricemove_d_all-2020-01-22 14_39_01.117

Concerns as Herbert Wigwe sells 28.8 million Access Bank shares….

By Nairametrics,

Access Bank’s Chief Executive Officer, Herbert Wigwe, has sold 28.86 million shares worth N297.82 million, which represents 2.33% of his stakes in the bank. The transaction, which was done through Trust Capital Limited, was disclosed in a notice filed at the Nigerian Stock Exchange.

This means Wigwe had sold 6.81% of his stake in the financial institution, as he had sold a 4.48% stake on Friday. The bank disclosed in a notification of insider dealing, which was filed at the NGSE on Friday, that its CEO sold 55.6 million shares ordinary shares, which he held indirectly.

Details:

Access Bank said Wigwe held a total of 1.24 billion indirect shares as of April 2019. The indirect shares were made up of 537.73 million shares owned by United Alliance Company of Nigeria Limited and 702.56 million shares owned by Trust and Capital Limited. It said the 55.6 million shares sold were from Wigwe’s indirect holding through Trust and Capital Limited. It added that the number of shares sold was an aggregation of sales made on four different instances ― 3.61 million shares on January 10, 20.14 million shares on January 13, 9.24 million shares on January 14 and 22.63 million shares on January 15. Wigwe sold the shares at a price of N10.80 on January 10, N10.70 on January 13, N10.56 on January 14 and N10.22 on January 15.

Out of the 15 members of Access Bank’s board of directors, Wigwe has the highest stake in the bank, directly owning 201.23 million shares and 1.24 billion shares indirectly.
The additional 28.86 million shares were sold at N10.32 on January 16.

Investors raise concerns:

In what is looking like a major concern to investors, the bank CEO’s is selling down his shares just after the bank announced that it had suspended its closed period. Earlier in the year, January 8th the bank announced that it had suspended its closed period which it had earlier communicated on December 30th. The closed period was supposed to last until January 29th, 2020. Some investors who spoke to Nairametrics on the condition of anonymity are now wondering if there is a connection between the back to back sale of shares and the abrupt suspension of the announcement of the closed period.

While there is no proof, it is likely that as a leading member of the management of the bank he may have seen the results of the company giving him an undue advantage over other shareholders of the company who are not privy to results.

EFCC Invite:

Herbert Wigwe was recently reported to have been arrested by officials of the EFCC even though the bank denied it issuing a statement on the website of the Stock Exchange. The bank claimed he was merely invited by the EFCC for talks on how to resolve the issue between ex-Abia State governor, Orji Uzor Kalu, and his company Slok Nigeria Limited and Access Bank.

Given the differing interests of the Commission and the Bank on the assets of Slok deriving from the court’s recent judgment on Slok, the Commission had invited for interrogation officials of Access Bank who were handling the Bank’s recovery efforts on Slok credit including its Group Managing Director.

The share price of Access Bank Plc closed at N10 on December 31, and recorded a sustained appreciation up till January 8, where it closed a N11.80. Access Bank closed trading on Tuesday at N10.05 having opened at N10.75.

Mixed Trend May Linger On NGSE, Amidst Profit Taking, As Investors Ride On Pullbacks, Low Valuation

Market Update for January 21, 2020

Volatility and mixed performance continued on the Nigerian Stock Exchange on Tuesday as equity prices closed lower, halting three trading sessions of bull-run on profit taking in highly capitalized stocks, especially in the banking sector, at a time the World Bank expressed pessimism in its outlook for the nation’s economy. There was also cautious trading ahead of the Central Bank of Nigeria’s two-day Monetary Policy Committee meeting which kicks off tomorrow, which also helped to dampen buying interest as investors await the meeting’s outcome.

The NSE entered the year 2020 with clear tailwinds such as low interest rates in money market instruments, a situation that has inspired the market’s YTD recovery, while removing the risk of high cost of funds that had remained one factor hampering economic productivity and growth.  The CBN has set the tone for economic prosperity with its unconventional policies since the second tenor of its governor, Godwin Emefiele kicked off in June last year.

The Purchasing Managers’ Index has also shown improvements in business confidence, from a period of slow expansion, which has been visible over the past three quarters, helped by the apex bank’s actions and the continued border closure by government which triggered expansion in productivity and business activities. The good news is that confidence has returned quickly, even as the PMI is set for positive surprises.

Tuesday’s trading opened slightly on the upside in the morning and oscillated between mid-morning and midday before pulling back in the afternoon on profit taking in large cap and dividend paying stocks, especially those that rallied in recent times. However, the NSE All-Share Index touched intraday low of 29,360.13 basis points from its high of 29,723.25bps, before rising slightly and closing the day lower at 29,462.76bps on a low traded volume.

Market technicals were negative and mixed, with volume traded slightly higher than the previous sessions, even as market breadth favoured the bears, while selling pressure, as revealed by Investdata’s Sentiment Report, showed 28% ‘buy’ position and 72% ‘sell’ volume. The day’s total transaction volume index stood at 0.82, while the impetus behind the day’s performance remained strong but slightly down, with Money Flow Index reading 74.43points, from the previous 78.86ps. This is an indication that funds left the market on profit booking.

Index and Market Caps

At the end of Tuesday’s trading, the NSEASI shed 247.80bps, closing at 29,462.76bps from the 29,710.56bps, representing a 0.83% drop, just as market capitalization shed N127.64bn, closing at N15.18tr, from an opening value of N15.3tr, representing a 0.83% depreciation in value.

The downturn during the session was impacted by selloffs in  Dangote Cement, Zenith Bank, UBA, Guaranty Trust Bank, UACN, BUA Cement, Access Bank, FCMB, Eterna and Arbico, among others. This impacted negatively on the NSE’s Year-to-Date gain, reducing it to 9.78%. Market capitalization, YTD, fell to N2.22tr, representing an 17.11% growth over the year’s opening value.

Mixed Sector Indices

The sectoral performance indexes were largely bullish, except for the NSE Banking and Industrial Goods Index that closed in red by 3.58% and 0.45% respectively, while the NSE Insurance index led the advancers, after gaining 0.70%, followed by the Consumer Goods and Oil/Gas with 0.34%, and 0.29% respectively.

Market breadth stayed negative, with decliners outnumbering advancers in the ratio of 16:15, while market activities were mixed, with volume traded up by 7.10% to 272.84m shares from the previous 266.95m units, while transaction value dropped by 4.34% to N3.71bn from Monday’s  N4.18bn. The day’s volume was driven by trades in Zenith Bank, Access Bank, UBA, Oando and FCMB

Law Union & Rock Insurance and Unity Bank were the best-performing stocks of the day, gaining 9.09% and 6.15% respectively to close at N0.60 and N0.69 per share, on market forces and sentiments. On the flip side, Arbico and Eterna lost 9.97% and 9.72% respectively, closing at N3.16 and N3.25 on selloffs and profit-taking.

Market Outlook

The prevailing intraday mixed trend and performance may continue in the midst of profit taking and positioning by investors taking advantage of the pullbacks, ahead of the MPC meeting, the first in 2020, and the full-year earnings reports of companies. This is also against the backdrop of the prevailing low-interest rate regime in the money market and mixed economic outlook for 2020, at a time the Presidential Economic Advisory Committee is yet to harmonize monetary and fiscal policies and give clear direction.

Also, investors and traders are positioning in anticipation of the 2019 full-year earnings reports, amidst changing sentiments in the hope of improved liquidity and positive economic indices which had pushed the market out of the bearish zone.

We see Investors focusing on the upcoming full-year earnings season, targeting companies with strong potential to grow their dividend on the strength of their earnings capacity.

Again, the current undervalued state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation in the New Year.

 

Ambrose Omordion

 

FY 2020 Outlook: Treading Uncharted Waters….

By CardinalStone Research,

Executive Summary:
We expect improvement in the domestic economy on the back of the structural changes that began in 2019. Notwithstanding, per capita income is likely to remain frail with scope for further changes in consumption patterns and, possibly, excess capacity for a few companies. Monetary bias could remain largely dovish, with administrative measures set to leave system liquidity at elevated levels and yields mostly lower in H1’20. Bold reforms would be needed to lubricate proposed implementation of Nigeria’s N10.6 trillion budget to properly stimulate growth.

13054-CardinalStone FY 2020 Outlook – Treading Uncharted Waters-proshare

NSE Pricelist for Jan 21, 2020

TRW_STOCKBROKERS_stxpricemove_d_all-2020-01-21 14_37_16.331

Investors Position For 2019 Full-Year Earnings, Amidst Hope For Improved Liquidity

Market Update for January 20, 2020

Trading activities on the Nigerian Stock Exchange NSE), on Monday, was volatile and mixed, extending the recovery moves of the market as composite All-Share index closed higher on a low traded volume, a sign that traders and investors are cautious ahead of the two-day Monetary Policy Committee MPC) meeting beginning on Thursday. There is also the continued profit booking as reflected in the losing momentum before the three days of the uptrend.

At the end of Monday’s trading session, the market’s benchmark index formed a double top that supports a pullback, depending on market forces. We expect that a breakout of this resistance level of 29,812.64 basis points will usher in a markup phase that will be a function of the MPC meeting’s outcome, not forgetting the impact of the expected corporate earnings.

The rise in the notification about insider dealings in listed stocks is a welcome development as it promotes transparency while guiding investment decisions.

Meanwhile, Monday’s trading started on the upside in the morning and oscillated for the rest of the day on mixed sentiment as the NSEASI touched intraday high of 29,713.84 basis points from its low of 29,545.93bps, before closing the session higher at 29,710.56bps on positive market breadth.

Monday’s market technicals were positive and mixed, with volume traded lower than the previous sessions, in the midst of positive market breadth and strong buying pressure, as revealed by Investdata’s Sentiment Report of 98% ‘buy’ position and 2% ‘sell’ volume. The day’s total transaction volume index stood at 0.81, just as the energy behind the day’s performance remained strong but slightly down, even as Money Flow Index read 78.86points, from the previous 79.12ps. This is an indication that funds left some stocks by way of profit-taking despite the upmarket.

 

Index and Market Caps

At the close of trading on Monday, the benchmark index NSEASI, gained 92.04bps, closing at 29,710.56bps from the 29,618.58bps, representing a 0.31% growth, just as market capitalization was up by N47.41bn, closing at N15.3tr from its opening value of N15.26tr, representing a 0.31%  value gain.

To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current market recovery ahead of full-year earnings reporting season portfolio reshuffling and repositioning as we await an economic reform policy to stimulate and re-track the economy again.

The session’s uptrend was impacted by the demand for stocks like MTN Nigeria, Zenith Bank, UBA, Guaranty Trust Bank, Total Nigeria, Lafarge Africa, NASCON, BUA Cement, FBNH, Ecobank Transnational Incorporated, FCMB and Law Union, among others. This impacted positively on the NSE’s Year-to-Date gain, increasing it to 10.69%. Market capitalization, YTD, climbed to N2.35tr, representing an 18.10% growth over the year’s opening value.

Bullish Sector Indices

The sectoral performance indexes were largely bullish, except for the NSE Consumer Goods Index that closed 3.14% lower, while the NSE Industrial Goods index led the advancers, after gaining 1.95%, followed by the Banking, Insurance, and Oil/Gas with 1.16%, 1.10%, and 0.34% respectively.

Market breadth remained positive with advancers outnumbering decliners in the ratio of 22:12, while market activities were mixed as volume traded was down by 17.85% to 266.95m shares from the previous day 324.97m units, while transaction value increased by 17.75% to N4.18bn from Friday position of N3.55 billion. The day’s volume was driven by trades in shares of Access Bank, Zenith Bank, Guaranty Trust Bank, FBNH and UBA.

Law Union & Rock Insurance and Total Nigeria were the best-performing stocks for the day, as they gained 10% and 9.35% respectively to close at N0.55 and N117.00 per share, on market forces and sentiments. On the flip side, NCR and Nestle Nigeria lost 9.88% and 6.12% respectively, closing at N3.65 and N1380.00 on selloffs and profit-taking.

Market Outlook

This prevailing intraday mixed trend and performance may continue in the midst of profit-taking and positioning by investors taking advantage of the prevailing low valuation, ahead of the MPC meeting, the first in 2020, and the full-year earnings reports of companies. This is also against the backdrop of the prevailing low-interest rate regime in the money market and mixed economic outlook for 2020, at a time the Presidential Economic Advisory Committee is yet to harmonize monetary and fiscal policies and give clear direction.

Also, investors and traders are positioning in anticipation of the 2019 full-year earnings reports, amidst changing sentiments in the hope of improved liquidity and positive economic indices which had pushed the market out of the bearish zone.

We see Investors focusing on the upcoming full-year earnings season, targeting companies with strong potential to grow their dividend on the strength of their earnings capacity.

Again, the current undervalued state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation in the New Year.

Also, traders and investors need to change their strategies, because of the NSE’s pricing methodology, the CBN directives and their impact on the economy in the nearest future.

 

Ambrose Omordion