Wednesday, February 11, 2015 9:30 AM / Research
The recent market performance remains impressive but it is still not enough to say that the market is rebounding, considering the number of hurdles to cross in order to gain the needed momentum, though the outlook suggests otherwise, while we believed that the recent pattern would be put to test soon as we move closer to the election period. Nevertheless, the market has technically moved into a neutral position in the short term but remained bearish in mid-long term. This indicates improved optimistic trading towards c.
Nigerian stocks maintained positive outlook in the last 3weeks, recording an impressive performance in terms of low volatility and steady growth in market net value despite the shaky economic fundamentals and uncertainties in the socio-political space.
Surprisingly, the equities market recorded +13.67% appreciation in just 18 trading sessions. It has erased losses to put YTD loss at -9.53% against -20.41% recorded 17days back, moving from 27,585.26 to 31,355.28 basis points on the back of persistent bargain hunting.
The impressive rally has been mainly driven by cheap valuation across board while high expectations towards Q4'2014 reward and earnings season could not be isolated from this unprecedented rally - this has added N1.20trillion to the market net worth.
As a result of this, majority of the dividend paying stocks have appreciated greatly in value, which further stresses the benefit and value of patience and long term investing approach that we consistently preached throughout 2014.
We would like to recall as stated in our previous report, that you should allow dividend yield to be your guide towards investment in equities in a bear market, simply because of the huge sell-off, which has created great opportunity in dividend paying stocks. In case you missed it, here is the list of Top dividend-yield stocks in 2014 to consider in 2015
To buttress this further, majority of value stocks which were previously trading at their 3yrs low (due to heavy sell-off witnessed in 2014 and early 2015) have regained their stamina well above 52weeks low, moving closer to 52weeks high range- this further indicates stocks investors are patronizing in the last 17 trading days.
Just as the recent rally has been able to reveal stocks on hunters’ list, which remain function of healthy fundamentals. In the subsequent paragraphs, we shall present the list of these stocks while we are cautiously optimistic they would sustain the uptrend momentum.