Maintaining last week’s trading pattern, equities trading on the floor of The Nigerian Stock Exchange swerved, as the lead performance index NSEASI gave up 75Bpts of its trading points and closed the day’s trading activities at 39.028.51 from 39,323.62. By this performance, the total lost points during the month of May is now 543Bpts. See the index movement table for details.
Value loss by the market capitalization of the listed equities during today’s trading activities was N106.897 billion, same as 75Bpts below the opening value. Meanwhile, trading activities for the day produced 17 advancers and 53 lagers. NSEASI Year to Date gain is now 2.05% while the Market Capitalization Year to Date gain stood at N527.825 billion same as 3.88% above the year’s opening value.
As the bear takes full control of the market performance, market is fast approaching the starting point for the year. in our opinion, this is an outstanding opportunity for investors to take long term positions in equities of their choices.
Although the market had consistently shied away from likely impact of the upcoming national election, economic indicators remain positive and attractive. Recently, 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.