Market Sentiment Analysis for WE 110512

Sentiment Analysis Report W/E May 11, 2012

Sunday, May 13, 2012/ Proshare Research

The Diagnosis Analysis of the market activity in the week ended May 11th 2012 technically revealed a decline in market optimism and weak bargain drive with significant increase in speculative activities in the investors trading pattern as against an improved market optimismis and sustained positive sentiments with steady active bargain tendency observed in the previous weeks performance. In the week just ended, weak bargain and profit taking tendency was observed across the major sectors as market sentiments turned negative, mainly towards big and medium CAP stocks. However, there is concentration of weak bargain postures is some active sectors while we observed fresh and sustained moderate sell tendency in some unattractive sectors. Nevertheless, the fresh and sustained moderate sell tendency outweighed the weak buy side as most active and liquid stocks appeared ripened for profit taking while the short termist remained in control of market direction - a major reason for the increase in speculative propensity and pessimistic activities in the market. To date, the indecisive posture of the market remains high, alongside a sustained reduced activity level as sideline attendants appeared to take positions subtly, yet remain a significant feature. Prescription and the likely expectation in the coming periods: The presence of short term players in the market is likely to increase speculative trading in the coming sessions as the All Share Index (ASI) is still within the overbought range, indicating possible extension of price correction to more sectors. We however envisage a balanced outlook in the coming week as more sustained and renewed bargain tendency will likely cushion the impact of speculative trading - a pointer to market price volatility as the bulls and bears will jostle for supremacy.

Market Diagnostic Score Card

Market Gauges Scores Remarks The negative posture was significantly impacted by activities towards big and medium cap stocks across the sectors. Low bargain and moderate sell drive was observed when compared to +2.52% recorded in the previous week. This confirms the decrease in optimism and profit taking tendency witnessed in the week which further reflects the moderate sell tendency towards big and medium caps. The market RSI shows that market is losing uptrend momentum while moving into waning posture. Market RSI closed lower as against previous week of 84.22. More importantly, this indicates further that market is still at its top i.e. overbought range. Short term correction is not in doubt. Illiquidity of some stocks, low purchasing power, low risk appetite, feeble confidence and wary posture of investors reflected here significantly - this is considered too high- an unimproved posture against 53.79% observed in the previous week. There is a decline in the optimism level of the market against the previous outlook of 31.82%. Also, there was low bargain tendency as the optimistic activity on the bourse closed lower at 39.13%, against total market activity, from 82.21% recorded in the

ASI

-0.19%

Market Breadth

Negative

Market RSI

72.34

Indecision level

(%)

60.71%

Optimism Level

(%)

22.86%

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Market Sentiment Analysis for WE 110512 previous week. There is sustained increase in pessimism level in the market - an unimpressive posture over the previous outlook of 14.39%. Pessimism Level (%) 16.43% This shows that 16.43% of market participants in the week were pessimistic about the market. However, there was a significant increase in the pessimistic activity level to close higher at 59.53%, against total market activity, from 3.70% recorded in the previous week.

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Technically, market sentiments during the week favoured liquid and active stocks of Medium and Large CAP categories in the Agriculture, Conglomerates, Consumer Goods, Services, Industrial Goods, Oil & Gas and Construction/RealEstate sector(s) in that order which further revealed the sectors investors patronised in the week. On the other hand, it was observed that market sentiments moved against the Financial Services, Healthcare and ICT sector(s) as sell sentiments was stronger in the sector(s).
Sector Agriculture Conglomerates Consumer Goods Performance 5.18% 2.44% 2.31% Sector Movers PRESCO, OKOMUOIL TRANSCORP DANGFLOUR, DANGSUGAR IKEJAHOTEL, UPL Direction & Trading Psychology

Sustained and Active bargain tendency observed in the sector, indicating attractive posture of the stock(s) in the sector

Services

0.71%

Renewed bargain sentiments observed in these sectors due to depressed and attractive prices that followed the heavy sell tendency observed in the previous week Continued and Waning bargain tendency observed, indicating subtle profit taking in the sectors. Short trend reversal is not in doubt in the coming periods. Renewed bargain sentiments observed in these sectors due to depressed and attractive prices that followed the heavy sell tendency observed in the previous week Indecisive (no active transactions)

Industrial Goods

0.45%

WAPCO, CCNN, DANGCEM

Oil & Gas Construction/Real Estate Natural Resources

0.33% 0.11% 0.00%

MOBIL, MRS JBERGER

Financial Services

-0.36%

IBTC, UBA, SKYEBANK, GOLDINSURE, ACCESS, FCMB

Mild sell tendency observed in this sectorSpeculating trading was observed as profit taking tendency dominated Waning and Continued sell tendency was observed as bears have been in control - a short term rally in the coming periods is not in doubt Fresh and Active sell tendency was observed as the sector(s) moved from flat position

Healthcare

-1.38%

GLAXOSMITH, MAYBAKER

ICT

-1.38%

NCR

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Stock Trend & Direction We conducted a review of stocks that have sharpened market direction and performance in the week - using technical tools like RSI, MACD, VOLUME, MFI, CANDLESTICK,

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Market Sentiment Analysis for WE 110512

MOVING AVERAGES, BOLLIGER BANDS and ACCUMULATION & DISTRIBUTION to reveal investors sentiments towards the market movers.

THE BIG VOLUME UBA Plc experienced moderate sell tendency and bearish sentiments in the week to record -5.5% loss as against 12.9% gain recorded in the previous week - price correction (profit taking) was observed towards the stock due to a 7-month high recorded recently amid increased market volatility during the week. The stock experienced distribution and cash outflow throughout the week as revealed by its money flow index while the growing bearish volume buttressed the negative sentiments witnessed in the week. However, the stock remained bullish in both short and mid-long term period as revealed by its price moving average, buttressed by MACD. This indicates that the stock is still within the bullish range. To buttress this further, the stock ended the week with strong bullish sentiments as revealed by candlestick (bullish engulfing) pattern in the last trading session while the stock likely to establish new support level at N3.50 as the chance of consolidating into less volatile trading range has increased with corresponding bullish volume. Technical conclusion on sentiments: barring any unforeseen market volatility in the coming week, the emerging sentiments towards the stock appears positive with moderate bullish tendency as the stock ended the week with an impressive bargain posture and a corresponding bullish volume. The chart below shows MACD, candlestick, RSI
and volume analysis.

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Market Sentiment Analysis for WE 110512

FIRST BANK Plc experienced mixed sentiments and weak bargain tendency in the week to record -2.0% loss as against 7.0% gain recorded in the previous - increased price volatility was witnessed towards the stock amid weak bargain posture and increased market volatility. The stock experienced more distribution in the week as revealed by its volume trend while money flow index maintained a downtrend throughout the week - indicating persistent sell tendency in the week. Nevertheless, the stock retained its bullish posture in both short and mid-long term period as revealed by price moving average, buttressed by MACD. Technical conclusion on sentiments: The emerging sentiments appear positive with moderate reliability as bargain tendency appears weak. Though, the stock retains its bullish mode as revealed by price moving average and MACD indicating that the stock is within the ambit of the bulls. The chart below shows MACD, candlestick, RSI and volume
analysis.

THE GAINERS DANGFLOUR Plc experienced a strong bargain tendency in the week to record 26.8% gain against 9.00% recorded in the previous week - sustained buying and impressive positive sentiments was observed towards the stock in the week while the stock recorded a new high of N6.01 slightly above the N6.00 recorded on 6th Jan 2012. The stock witnessed active bargain trend, recording maximum gain throughout the week while the price position above upper Bollinger band buttressed the strong bargain tendency.

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Market Sentiment Analysis for WE 110512

This suggests that the price uptrend has a appeared to be in bullish mode as revealed by by MACD, though the volume trend revealed money index flow recorded a zigzag pattern, stock.

good chance to continue as the stock its price moving average and buttressed more of distribution in the week while indicating unstable money flow into the

However, the stock closed in the overbought range as revealed by RSI buttressed by price position above upper Bollinger band, suggesting the possibility of short-term pull back within the bands while price volatility is not in doubt as the bands are wider than normal. Technical conclusion on the sentiments: The stock remains bullish in the short term, indicating the stock is yet to attain full bullish mode while short term pull-back is possible in near term with moderate reliability due to its overbought posture as revealed by RSI. Nevertheless, the stock appears positioned to sustain its uptrend, considering its gain pattern. The chart below shows MACD, candlestick, RSI and volume analysis.

DANGSUGAR Plc experienced moderate bargain and positive sentiments in the week to record 16.0% gain as against -10.4% loss recorded in the previous week - improved bargain sentiments observed towards the stock in the week. The stock maintained a neutral posture in the short term while appearing bullish in the mid-long term period - buttressed by MACD; indicating that the stock is yet to attain full bullish mode as revealed by its price moving average. Also, the volume trend revealed active buying pattern as growing accumulation was observed throughout the week while the money flow index maintained northward trend, buttressing the active buying.

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Market Sentiment Analysis for WE 110512

Technical conclusion on sentiments: There is no signal of price volatility in the coming period as the stock has moderate possibility to sustain its uptrend, considering the growing momentum revealed by RSI. However, profit taking is not in doubt as its candlestick analysis revealed the presence of bears in the week. The chart below shows
MACD, candlestick, RSI and volume analysis.

THE LOSERS MAY & BAKER Plc experienced continued sell tendency and sustained bearish sentiments to record -13.4% loss as against -13.6% loss recorded in the previous week - an unrelenting sell tendency which continued to further depress the stock (since 7weeks ago) while the stock recorded an all time low to close at N1.49. The stock has been in a prolonged bearish mode both in short and long term period as revealed by price moving average, buttressed by MACD while the stock appeared depressed and bottomed-out as revealed by RSI. To buttress this further, the money flow index maintained a prolonged negative posture. However, there was significant volume growth at the bottom, indicating new interest towards the stock while there was slight buying tendency in the last session as revealed by candlestick. This suggests possible trend reversal. Technical conclusion while exhibiting traits considering the buying corresponding volume
analysis.

on sentiments: The stock appears depressed and bottomed-out of a moderate possibility of trend reversal in the near term, tendency as revealed by candlestick in the last session and the growth. The chart below shows MACD, candlestick, RSI and volume

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Market Sentiment Analysis for WE 110512

SKYE BANK Plc experienced bearish sentiments and consistent sell tendency in the week to record -16.3% loss as against 2.6% gain recorded in the previous month - an overwhelmed sell tendency was observed towards the stock as market volatility increased during the week. The stock appears to be in a bearish mode in both short and mid-long term period as revealed by its price moving average while MACD buttressed the bearish posture. Also, the price position below bottom Bollinger band confirms the overwhelmed sell tendency as noted above. To buttress this further, the stock appears depressed as revealed by RSI while the stock is falling towards its 3months support level at N3.19. Technical conclusion on sentiments: There is an overwhelmed sell tendency towards the stock which may continue, considering the falling momentum while the price position below bottom Bollinger band buttresses this outlook. However, a trend reversal is not in doubt as the stock appears depressed and bottomed-out which could encourage a bargain drive. The chart below shows MACD, candlestick, RSI and volume analysis.

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Market Sentiment Analysis for WE 110512

Due Diligence
Valuation/Investment Ratio Book Value (N'm) Book Value/Per Share Price to Book EPS PE Profitability ROE (%) PAT Margin (%) PBT Margin (%) Revenue Growth Proshare Research 3.05% 1.62% 1.81% -3.77% 6.59% 10.48% 15.41% 24.09% 8.16% 5.29% 7.01% 4.27% 3.02% 12.49% 14.69% 12.61% 7.61% 25.58% 29.74% 32.94% 6.74% 26.57% 31.26% 42.49% DANGFLOUR 27,690 5.54 0.00 0.17 35.56 DANGSUGAR 42,520 3.54 0.00 0.23 16.19 MAYBAKER 3,138 3.20 0.00 0.26 5.70 SKYEBANK 114,948 8.70 0.00 0.26 12.74 UBA 181,131 5.60 0.00 0.43 8.94 FIRSTBANK 363,638 11.14 0.00 0.75 15.04

Price Trend
Price Performance
52 Weeks High 52 weeks Low 3 Month's (%) 6 Month's (%) 12 Month's (%) Price Trend Current Price 6.01 3.78 1.49 3.35 3.81 11.30 DANGFLOUR 19.00 3.85 36.90% 20.20% -68.37% DANGSUGAR 15.00 3.26 -14.48% -24.40% -72.31% MAYBAKER 4.49 1.49 -45.82% -37.92% -65.27% SKYEBANK 8.91 3.17 5.68% -32.19% -62.40% UBA 7.01 1.64 110.50% 34.15% -45.65% FIRSTBANK 14.00 7.95 11.22% 15.90% -19.29%

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Market Sentiment Analysis for WE 110512 15 Days MA 30 Days MA 50 Days MA 200 Days MA Proshare Research 4.78 4.56 4.59 6.64 3.56 3.62 3.70 5.97 1.86 2.01 2.17 2.71 3.86 3.85 3.98 4.52 3.59 3.10 2.96 3.17 10.94 10.36 10.51 10.11

Disclaimer: The information provided herein is our opinion only. Under no circumstances do any statements
here represent a recommendation to buy or sell your stocks or make any kind of an investment. You are responsible for your own due diligence. To summarize, we do not provide recommendations nor do we make any claims or promises that any information here will lead to a profit, loss or any other result. They are for your guidance purpose only.

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