As traders applaud the reported amendments of company income tax law, NSEASI further solidified recovery move, as it added 158Bpts and rounded up the fourth trading day of the week at 39,042.11 from 38,435.29. Safe NSE-Insurance and NSE-Oil&Gas index that shed points, other observed market indices closed on a positive note. Week to Date, the lead performance index is up by 605Bpts; while the Month to Date gain is now 246Bpts. See the index movement table for details.
Value gained by the market capitalization of the listed equities during today’s trading activities was N219.807 billion, same as 158Bpts above the opening value. Meanwhile, trading activities for the day produced 29 advancers and 19 lagers. NSEASI Year to Date gain is now 2.09% while the Market Capitalization Year to Date gain stood at N532.750 billion same as 3.91% 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.