Rounding up the last trading day of the week, trading activities on the floor of The Nigerian Stock Exchange maintained an upward swing of 54Bpts despite increased profit taking activities. It was a mixed performance amongst the observed market indices as shown in the index movement table. Week to Date, market added 511Bpts to its trading point while 1,791Bpts had been added so far in the month of January.
Value gained by the market capitalization of the listed equities during today’s trading activities was N87.444 billion, same as 54Bpts above the opening value. Meanwhile, trading activities for the day produced 21 advancers and 29 lagers. NSEASI Year to Date gain is now 17.91% while the Market Capitalization Year to Date gain stood at N2.544 trillion same as 18.70% above the year’s opening value.
Today’s gain was achieved in the face of heightened profit taking activities, as can be seen above, decliners’ log swell compared to other trading days. Although this further confirmed the bull strength currently roaming the market arena, we are of the opinion that the risk of playing the market has increased.
Aside the influx of foreign funds, we are of the opinion that market performance in the first month of the year is strong enough to attract more local funds to the equities market. For example, comparing the 18.70% gained within January 2018 alone with the last inflation figure of 15.37 YoY (as published by the national bureau of statistics for the month of December 2017), one could assume that the equities market had finally wiped off all losses caused to inflation in 2017.
On the strength of these, we expect the market to stage a defense of the points gained so far, especially now that the January MPC meeting had been suspended; although this will not be achieved without series of interval pull backs. Please note that a major determinant to market direction in the first quarter of the year is the full year earnings season. Thus, it is recommended that traders play with heightened cautiousness. Safe Trade.