Afrinvest Stock Recommendation For The Week 141019


Monday, October 14, 2019 / 11:07 AM / By Afrinvest Research


Market Last Week (Our Observation)

  • Last week, the local bourse posted a bearish performance as the ASI shed 1.7% W-o-W to 26,533.78 points while YTD loss stood at -15.6%. Similarly, investors lost N220.8bn as market capitalisation fell to N12.9tn.
  • Performance across sectors was bearish as 4 of 6 indices under our coverage lost W-o-W. The Consumer Goods index shed 4.0% to lead laggards. The Oil & Gas and Industrial Goods indices also pared 3.2% and 1.8% respectively. Similarly, the Insurance index fell by 1.6%. Conversely, the Banking index gained 1.0% while AFR-ICT index was flat.
  • ABCTRANS (+29.4%), AFRIPRUD (+13.6%) and NASCON (+12.5%) led the top performing stocks for the week while GUINNESS (-10.8%), PZ (-10.0%) and CHAMPION (-9.6%) led losers.

Market This Week (Our Expectations)

  • The Afrinvest Weekly Sentiment Indicator strengthened to 2.7 points from 2.6 points recorded in the previous week.
  • This week, we expect the bearish sentiment in the market to persist as there are no major catalysts to boost investor confidence, although we see opportunities for bargain hunting.

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Weekly Stock Watch for Technical Traders
Market Analysis... Domestic Bourse Lingers in the Deep 
As indicators suggested, the NSE All-Share Index lost last week, shedding 1.7% to settle at 26533.78 points. Again, its negative Directional Movement Index (-DMI) surpasses the positive Directional Movement Index (+DMI) and continues to display a super-strong ADX (Average Directional Movement Index), indicating the NSE-ASI's unwillingness to rise to prominence. Next week, we expect the index to continue to ramble in the negative territory. Our pessimism is on the back of the absence of any indicator to suggest possible triggers for a rebound in the near term.

Our BUY Recommendation
Of our BUY stocks last week, two gained - NASCON (+12.5%) and UACN (+9.2%). Yay!!
Based on last week's observations, SEPLAT (ADX: 35.40; MFI: 0.0) WAPCO (ADX: 50.36; MFI: 4.30; %B: 59.99), FLOURMILL (ADX: 31.89; MFI; 8.72; %B: 58.14), NASCON (ADX: 31.45; MFI: 14.88 ;%B: 84.51) and WAPIC (ADX: 28.53; MFI: 21.30; %B: 50.00) have strong prospects for fortune in the near term. These tickers currently hover around the oversold region with their +DMI bullying –DMI with >25 ADX value, signifying a strong trend. However, buyer's discretion is advised!

Our SELL Recommendation
Last week's observations also suggest that STERLNBANK (ADX: 41.22; MFI: 94.72; %B: 54.18), UACN (ADX: 30.35; MFI: 80.25; %B: 46.97), ZENITHBANK (ADX: 28.49; MFI: 28.39; %B: 24.95) and CADBURY (ADX: 25.22; MFI: 24.97; %B: 20.42) are the tickers on the bears' scale of preference. As it stands, these stocks are keen on heading south with –DMIs outstripping +DMIs and solid ADX values (>25). Closest to the overbought region and with a strong ADX, STERLNBANK emerges top potential loser.

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  • NB: Rate on N100M and above are negotiable and all rates are valid ONLY for fund received on/before 14th October 2019.

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Proshare Nigeria Pvt. Ltd.

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