Trading activities on the floor of the Nigerian Stock Exchange took another bearish walk as NSEASI gave up 25Bpts of its trading points and rounded up trade at 40,150.55 from 40,249.29. Safe NSE-Premium and NSE-Oil&Gas that added marginal points, other observed market indices closed below their respective opening points. Week to Date, 80Bpts had been lost while lost points during the current month is now 271Bpts. See the index movement table for details.
Value loss by the market capitalization of the listed equities during today’s trading activities was N35.767 billion, same as 25Bpts below the opening value. Meanwhile, trading activities for the day produced 15 advancers and 28 lagers. NSEASI Year to Date gain is now 4.99% while the Market Capitalization Year to Date gain stood at N934.260 billion same as 6.86% above the year’s opening value.
Market arena seems tense today as activities log shrank. More traders might be uncertain of the best trading strategy to adopt. Unlike other trading days, lower equities were seen on both the gainers’ and losers’ log. In our opinion, liquid traders should consider taking advantage of dropping prices.
Although the market had consistently shied away from likely impact of the upcoming national election, economic indicators remain positive and attractive. Only yesterday we reported the MPC decision to remain all status quo. This combined with the positive headline Inflation, the 1.95% growth in the GDP in the first three month of 2018, and the outstanding improvement in the oil price which have translated to a whooping improvement of the nation’s reserve are strong enough fundamentals to boost market performance.
In our opinion, major threats against investment at the moment is the upcoming national election while wavering foreign capital inflows and the recent hike in US Fed Rates are other threats at the moment. Only on Monday 21st May, 2018, the United States Federal Reserve said it had decided to raise the rate by 0.25% to a target range of 1.5% -1.75%. Policymakers also signaled the plan to increase rates twice this year, while raising the forecast for rate hikes in 2019.
We therefore recommend positions in equities currently suffering from the ongoing market uncertainties despite their respective positive numbers. Priority should be given to those with half year incentives as the market nears half year earnings season. Safe Trade.