Marker Chatter and Flashbacks on our calls

MARKET CHATTER

A major listed Nigerian beer and beverage maker will be coming to the market pretty soon to raise funds in a rights issue.

While Equity prices have collapses in Nigeria in the past two years stocks have been in a Santa type rally for the past few weeks which may have encouraged the proposed issuance.

Equity markets on Friday eked out a further gain of 0.56 percent on Friday.

Similarly, the Market Capitalization gained N52.07 billion, or 0.57 percent to close at N9.14 trillion.

Gains were largely led by ETI (+7.98%), CCNN (+4.95%), Union Bank (+4.59%), Dangote Cement (3.02%) and Oando (+1.17%).

FLASHBACK

We have made some calls on BusinessDay Markets Intelligence (BMI) and it is only fair to once in a while look back at what we said.

Call: Two weeks ago on December 5th we said about Mobil “We believe that while there is more upside to close the deal acquisition valuation gap, investors who have not already bought the stock may wish to avoid chasing it here. The easy money has already have been made on this one.”

Verdict: Mobil Oil Nigeria PLC (MOBIL: LAG), has sold off by -20.65% since its 52-week high of 340.00, set on Dec 05, 2016.

Investors should keep an eye out for the 50 day moving average (near N213 per share) for a potential entry point.

Call: On November 21 we wrote that Stocks had entered oversold territory noting that the “Market is currently trading at its 27-week low and has posted a consistence 5-week bearish streak.

The broad market is now in oversold territory, the first time since January this year, according to its Relative Strength Index (RSI), which is now below the 20 mark (see chart).The last time this happened in January, stocks rallied about 15 percent to the 26,000 points mark.”

Verdict: Stocks have rallied 4.7 percent since November 21, closing at 26,707.01 points on Friday.

 

PATRICK ATUANYA