It was easy to predict this weeks market. It stayed below 25,000, transactions and volume levels were low, possibly because not too many people were paying attention. Those who paid attention gained. The NSE-ASI closed at 24,770.52 +0.33% (1.00 % in the previous week). Volume was low at 0.684 billion shares (2.0 billion shares in the previous week). There is every chance the NSE-ASI will be a strong performer this year. This week we review 2010 and what it might mean for 2011.
Volume – This year’s volume at 93.5 billion is below the level seen in 2009 at 101 billion. If you recollect, in the first quarter, the pace seemed to suggest that it would exceed 2009. What is more important is that it is well above levels seen in the years before the margin driven days of 2007 and 2008. In effect an encouraging development.
NSE-ASI Change – in the same light the NSE-ASI recorded its first positive year with a +18.87% return as opposed to last years –34% decline. Combining this with encouraging volume might mean 2011 could be a promising year for “new entrants” to the market.
Extension of Trading Hours – December 6, 2010 trading hours were extended by 2 hours. Did this have any significant impact on market activity? Comparing trading volume after that date to the same period last year suggests not. 2009 saw 97k transactions with 6.5 billion shares (2010 95k shares with 6.0 billion shares changing hands). Maybe more time is needed to reap the benefits.
Key Expectations for 2011– the NSE-ASI confidently climbs above 30,000 - doesn’t necessarily have to stay above it, as long as it revisits time and again; expansion or elimination of the daily price cap – expansion being more feasible; AMCON activity should have positive impact on market confidence and resurgence - defined by a volume target of over 100 billion shares in the full year.
A premium profile on www.broadstreetlagos.com gives you access to the data you need for the stock market. Over the next few weeks we will discuss more indicators.
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