Afrinvest Stock Recommendation For The Week 190819


Monday, August 19, 2019  / 02:00PM / By Afrinvest Research 


Market Last Week (Our Observation)

  • The performance of the local bourse was bearish last week as the benchmark All Share Index (ASI) shed 1.4% W-o-W to settle at 26,925.29 points while YTD loss worsened to -14.3%. As a result, investors lost N185.9bn in value as market capitalisation fell to N13.1tn. 
  • Performance across sectors was bearish as 5 of 6 indices under our coverage trended southward W-o-W. The Consumer Goods index led laggards, down 6.6% while the Industrial Goods index trailed shedding 4.2%. Similarly, the Oil & Gas, Banking and Insurance indices lost 1.9%, 1.1% and 0.7% respectively. On the flip side, the AFR-ICT index emerged the lone gainer, up 1.8%.
  • The top performing stocks for the week were BOCGAS (+9.9%), UNIONDAC (+9.1%) and UNITY(+7.8%) while UACN (-18.2%), ETI (-17.2%) and LAWUNION (-15.4%) were the laggards. 


Market This Week (Our Expectations)

  • The Afrinvest Weekly Sentiment Indicator remained unchanged at 2.3x points.
  • Following the bearish performance last week, we expect sell pressures to dominate in the near-term given the generally negative mood and absence of catalyst to spur investor interest.


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Weekly Stock Watch for Technical Traders

Market Analysis NSE ASI Breaks Another Psychological Benchmark

The NSE All Share Index declined 1.4% to print at 26925.3 points. As has been the case recently, the Negative Directional Movement Index (-DMI) is not only outstripping the Positive Directional Movement Index (+DMI), it also continues to display a super strong ADX (Average Directional Movement Index), indicating the NSEASIs reluctance to rise to glory. This week, we expect the index to continue to wander within the negative territory. But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound in the near term.

Our BUY Recommendation
About the previous week... 
CUTIX, one of our BUY stocks, gained 4.0% W-o-W. Unfortunately, NIGERIAN BREWERIES - our top BUY - shed weight W-o-W. The silver lining? NB is closer to its oversold region and has more upside potential while topping, AGAIN , our BUY recommendations for this week.

Based on previous weeks observations, our recommendation remained unchanged. 
NIGERIAN BREWERIES(ADX: 32.55; MFI: 8.71; %B: 42.46, DANGCEM (ADX: 31.90; MFI: 57.88; %B: 23.48), OANDO (ADX: 26.34; MFI: 19.80; %B: -8.33), WEMABANK (ADX: 28.17; MFI: 35.70; %B: 20.01) and WAPCO (ADX: 48.93; MFI: 43.63; %B: 8.24) have strong prospects for fortune in the near term. These stocks currently hover around the oversold region with respective +DMIs bullying –DMIs with >25 ADX value, signifying a strong trend. Of these, our hot pick is NIGERIAN BREWERIES as it is set to create room for profit - a strong uptrend from the oversold region. Attention! Attention! Attention! The Nigerian market is currently not for the timorous.

Our SELL Recommendation
Previous week’s observations also suggest that 
TRANSCORP (ADX: 44.98; MFI: 56.12; %B: 47.86), MOBIL(ADX: 25.79; MFI: 43.09; %B: 42.46), STERLNBANK (ADX: 32.64; MFI: 41.23; %B: 86.74) and CADBURY(ADX: 42.91; MFI: 33.35; %B: 28.87) top our wish list for investors yearning lean pockets. As it stands, these stocks are tremendously heading for the deep with -DMIs outstripping +DMIs and stronger ADX values too (well above 25). Closest to the overbought region and with a strong ADX, TRANSCORP 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 5th August 2019.

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