NGX Rebounds Amidst Changing Market Fundamentals, Low Valuation Ahead Quarter End

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Caption: NGXASI Weekly Chart

The Nigerian Exchange (NGX) witnessed a positive sentiment in the first half of the year, regardless of the volatility and pullbacks that were due to profit taking across major sectors of the market which weighed on the composite All-Share index (NGXASI), following which it closed the period with a robust 33.64% gain. This was however a decline from the 40.09% height it touched before the slip due to correction on selloffs as funds seemingly flowed, attracted to the high yields in the fixed income market. There was also the effect of the Central Bank of Nigeria’s new minimum capital requirement set for the nation’s bankswhich further triggered portfolio rebalancing.

The low valuation in the midst of the oscillating market created entry opportunities for discerning investors and smart traders, as growth and defensive stocks dramatically outperform value stocks year-to-date. Our broad outlook of the market recovering and rallying theme points to a good chance that value stocks could begin to outperform in the second half of the year, is as a result of the changing market fundamentals and dynamics that are likely to support the market going into the future. On this note, effective combination of fundamental and technical analyses will help market players identify trading opportunities on time and manage risk.

The huge market opportunities in second half of 2024 will be discussed at the upcoming Q3 Investdata 2024Q3 Master Class, as market experts and professionals share profitable trading and investing strategies to help you navigate the Q3 and indeed, end the year profitably. As we move into the end of the second quarter, let the price actions and chart patterns below guide your investment decisions in the remaining three trading sessions of the week after the Sallah holidays.

NGX Banking Index Weekly Chart