Consolidating the last recovery move, equities trading on the floor of The Nigerian Stock Exchange added a whooping 246Bpts to its trading points as it rounded up the second trading day of the new week at 37,854.92 from 36,947.10. Safe NSE-Oil & Gas index that shed points, other observed market indices closed on a positive note. Week to Date, market is in the green by 282Bpts; meanwhile, today’s move reduced the lost points suffered within the month to 66Bpts. See the index movement table for details.
Value gained by the market capitalization of the listed equities during today’s trading activities was N328.839 billion, same as 246Bpts above the opening value. Meanwhile, trading activities for the day produced 39 advancers and 15 lagers. NSEASI Year to Date loss is now 1.02% while the Market Capitalization Year to Date gain stood at N102.715 billion same as 0.75% above the year’s opening value.
In our opinion, the newly found market zeal is as a result of the recent consistent free fall of equities’ share prices despite positive fundamentals. Recall that we constantly noted the unchanged market/individual listed equities’ fundamentals during the free fall session. The move have dragged most blue chip to a relatively cheap prices and this has gained the attraction of bargain hunters. Although, the recovery came with much vigor, we are of the opinion that treading the market arena with heightened cautiousness in necessary.
Like we have maintained before now, aside the recent reported slight fluctuations in the nation’s reserve (which the CBN had assured Nigerians, that, it’s only negligible swing that could be managed appropriately) and the anxiety trailing the upcoming national election, all other economic indicators have maintained positive outlook. Kindly note that our recommendation of heightened cautiousness is based on the unchanged market fundamentals during the free fall session and now; in other words, traders need to guide seriously against what is technically referred to as “Bull Trap”.
Please understand that, despite the dwindling prices of listed equities, corporate earnings remained intact. The implication is that, earnings yield will improve in the coming half year earnings season, as equities become cheaper and accessible. We are of the opinion that taking advantage of dropping prices against fundamentals remains an intelligent investment decision. Please note that full year earnings are expected from few equities with March financial year end. Safe Trade.