The Nigerian equity market on Thursday, November 12, 2020 went into the fourth Bullish for the week, surviving investors’ profit taking runs and crossing 35,000 points amidst strong recovery as market awaits tier 1 banks Q3 earnings releases.
The market experienced circuit breaker on today at 12:55p.m, when the NSE All-Share Index rose beyond the set threshold of 5%, triggering a 30-minute trading halt of all stocks. This was the first time that the circuit breaker had kicked in since its introduction in 2016.
The Circuit Breaker protocol was triggered by the increase of the NSE ASI from 33,268.36 to 34,959.39. The market reopened at exactly 1:25p.m. with a 10-minute intraday auction session, before resuming continuous trading till the close of the day at 2:30p.m.
Trading halts did not affect the clearing, settlement, and depository operations for matched trades, as these functioned as normal. Furthermore, all existing orders keyed in prior to the trading halt were re-activated and were matched upon resumption of trading.
At the close of trade, the All Share Index appreciated by 6.23% to settle at 35,342.46 points from the previous close of 33,268.36 points. The market capitalization grew by 6.23% to N18.468 trillion from the previous close of N17.384 trillion, thereby gaining N1.08 trillion.
Commenting on the market performance, Aruna Kebira, Chief Dealer of Global View Capital Limited stated pointed out that the current bullish trend is expected as long as smart money is still coming into the market. According to him: “all the monies from the money market are looking for alternatives and the only place to go to is the capital market. As far as I’m concerned, the unprecedented growth in the market was expected.
Should we expect sharp decline as we are seen this sharp rise?
There must be profit taking. You can’t run away from that. As the market is rising, people will be taking their profit. It will get to a level that it will climax. We have seen the index at over 35,000 points today, by the time it gets to 40,000 points, the market gets to rest. The highest I have seen in the market is 55,000 around 2004/2005. What we are seeing here has happened in 2015, so there will be profit taking along the line. There is a level the price can go even when people wants to buy and it will no longer be bullish. Some people are bullish now; they want to buy at the highest price with the hope that the price will rise tomorrow. It get to a time that people will no longer be bullish; they want to buy but at a lower rate.
Stocks to Watch
- All the banking stocks are doing well.
- WAPCO closed on bid today at N23.95, people did not get to buy what they wanted because it was not available. At that, the share price of WAPCO has uptrend potential going forward.
- All the pharmaceutical companies that may likely benefit from government intervention. When they bring Covid-19 vaccine, they will be the one to sell it. If the government buys vaccine, they can’t do it themselves, they will have to go through the pharmaceutical firms. They have found the cure for COVID-19 and it has been presented to U.S President Elect, Joe Biden. Even President Buhari commented that they shuld be fair in distributing the vaccine. So if there is franchise to manufacture the vaccine, it will go through the pharmaceutical companies. Investors should keep an eye on that.
Market Breadth
The market breadth closed positive as 65 equities gained while 8 equities declined in their share prices.
Percentage Gainers
C&I Leasing, Northern Nigerian Flour Mills (NNFM), Cadbury, Julius Berger, Presco, Cutix, BUA Cement, Sterling Bank, and Airtel led other gainers as they all grew their share prices by 10% respectively.
Neimeth, NAHCO and Fidson among other gainers also grew their share prices by 9.92%, 9.91% and 9.90% respectively.
Percentage Losers
Global Spectrum Energy led 7 other price decliners as it shed 9.89% of its share price to close at N4.19 from the previous close of N4.65.
Eterna Plc, May & Baker and Morrison Industries among other price decliners also shed their share prices by 9.86%, 9.72% and 9.26% respectively.
Volume Drivers
- First Bank of Nigeria Holdings traded about 121.49 million units of its shares in 710 deals, valued at N1 billion.
- Access Bank traded about 100.85 million units of its shares in 640 deals, valued at N992.77 million.
- UBA traded about 80.45 million units of its shares in 627 deals, valued at N770.43 million.