Monday, October 30, 2019 / 10:40 AM / By
Afrinvest Research
Market Last
Week (Our Observation)
- Last week, the local bourse
posted a bearish performance as the ASI lost 2.5% W-o-W to 26,987.45
points while YTD loss stood at -14.1%. Similarly, investors lost N334.7bn
as market capitalisation fell to N13.1tn.
- Performance across sectors was
bearish as 4 indices under our coverage lost W-o-W. The Consumer Goods
shed 4.9% to lead laggards. Oil & Gas and AFR-ICT indices also pared
2.2% and 2.6% W-o-W respectively. Similarly, the Banking index was down
3.9%. Conversely, The Insurance and Industrial Goods indices gained 5.7%
and 0.1% W-o-W respectively.
- CONTINSURE (+20.1%),
LAWUNION (+12.8%) and NIGERINS (+10.0%)
led the top performing stocks for the week while FIDSON (-18.9%),
ETI (-14.6%) and UACN (-14.4%)
led losers.
Market This
Week (Our Expectations)
- The Afrinvest Weekly Sentiment
Indicator weakened to 2.6 points from 3.0 points recorded in the previous
week.
- This week, the bearish
sentiment in the market is expected to continue as there are no major
catalysts to boost investor confidence, although we see
opportunities for bargain hunting.
Weekly Stock Watch for Technical Traders
Market
Analysis... NSE ASI Mellows Further
The NSE All Share Index lost last week as it dipped 2.5% to print at 26987.45
points. In line with recent trend, the Negative Directional Movement Index
(-DMI) still outstrips the Positive Directional Movement Index (+DMI) and
continues to display a super-strong ADX (Average Directional Movement Index),
indicating the NSEASI's reluctance to rise to glory. In the coming 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
Of our BUY stocks last week , only 1 gained - WAPCO (1.6%).
Based on last week's observations, STANBIC (ADX: 37.29; MFI: 0.0;
%B: 28.40), our top BUY, as well as UACN (ADX: 32.53; MFI: 0.0; %B:
1.91), NASCON (ADX: 34.67; MFI; 2.03; %B: 46.88), REDSTAREX (ADX:
51.33; MFI: 2.25 ;%B:132.92) and DANGSUGAR (ADX: 28.79; MFI: 7.92;
%B: 40.74) has strong prospects for fortune in the near term. These stocks
currently hover around the oversold region with their +DMI bullying -DMI with
>25 ADX value, signifying a strong trend. The Nigerian market is currently
not for the timorous. Caveat emptor!
Our SELL Recommendation
Previous week's observations also suggest that CONOIL (ADX:
69.54; MFI: 59.32; %B: 9.10), NEIMETH (ADX: 63.50; MFI: 27.44;
%B: 45.77), PRESCO (ADX: 97.68; MFI: 24.35; %B: 35.57) and CADBURY (ADX:
26.92; MFI: 22.16; %B: -33.36) 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 (well above 25). Closest to
the overbought region and with a strong ADX, CONOIL emerges top potential
loser.
- NB: Rate on N100M and above are negotiable and all rates are valid ONLY for fund
received on/before 23rd September 2019.
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