Market Update for December 10

The recovery and seesaw movements on the Nigerian Exchange persisted on Tuesday, as positive sentiment resurfaced due to buying interests in mid and larger cap stocks that weighed positively on the composite NGX All-Share index as it closed marginally high. This halted the previous session’s loss on a very high volume and positive market internals. Bargain hunters took advantage of the pullback to buy value stocks ahead of the Q4 and unaudited full-year earnings reporting season in January 2025.

The bulls staged a come back on a high volume and expanded breadth that reflected the inflow of funds into the equity space in preparation of the Santa Claus rally that ushers in the new year 2025. Despite forming a top reversal chart pattern that signal a reversal or continuation of trend that needs confirmation. The gradual return of smart money at the current state and timing of the market creates buying opportunities for discerning players ahead of January effects that had turned a positive pattern and trends on the NGX in recent years to guide positioning in the right stocks at the right prices. The nation’s economic managers continue to trade the economy for foreign inflow with high interest rate that is driving low productivity and failed to checkmate inflation of today.

The NGX’s index cup and handle chart pattern formation that signal a bullish trend underway, as players are looking to positive trend, with Africa Prudential, Conoil, Golden Breweries, Tantalizer and NGX Insurance index hitting a new 52-week high. Just as end of the year positioning continued on the back of cross deals and others in the market. During the session, the following companies: Aiico, Conhall Plc, Learn Africa and University Press released their Q1 and Q3 2025 earnings forecast respectively, to guide the investing public, while Aradel Holding informed the market of acquiring 5% minority shares in Chappal Energies Maunitius Ltd, while Accesscorp   update the market on expanding operation to Malta.  As Ucap and Aradel informed the market of insiders dealing.

Money flow and other momentum tools were up, presenting buy opportunities for investors and traders who understand the importance of buying low and selling high in any market condition in the midst ongoing volatility. Despite, the mixed sentiment in the midst of expected breakout of resistance levels of 98,273.64 basis points and 98,340.10ps to sustain the rebound, thereby creating the perfect setup for high probability of reversal or continuation to catch end of year repositioning at the right price. Also, as the index still trade above the T-line and the two moving averages of 50-EMA and 50-SMA, this indicates relatively strength in the midst of changing market fundamentals and technicals on the NGX and the economy.

Technically, the NGX is on a consolidating phase in the midst of recovery and oscillation, as candlestick formation and momentum indicators reveal a somewhat strength in the market. As ADX is looking down to read 24.89 points, while RSI and Money Flow Index were up at 55.94 and 55.21 points against the previous session’s 54.57 and 52.00 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds entered the market on a mixed sentiment in some sectors and position taking in others on a daily time frame. Also, trading volume pattern continued to oscillates, suggesting buying interest and selloffs in the market amid players revaluing the market and economic events in the face of policy direction of the government that look inconsistent.

To navigate the rest of this year and beyond profitably, running with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday trading day “and also get investdata technical toolbox to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent range market. Despite the oscillating volume of transaction witnessed in recent time, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.

Oil prices on Tuesday were steady to continue its oscillation, trading at $72.15 per barrel in the midst of US fed rate cut and hope of China stimulus measures. As OPEC delay production hike in the face of ongoing geopolitical tensions in the Middle East and Russia war with Ukraine. As US President-elect tariff threats its trade’s partners and global economy outlook.  The rising geopolitical uncertainties across many economies remains a threat to the global economy and energy consumption. This trend may likely continue for the rest of 2024, while the up and down movement continues to drive volatility, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.

Tuesday’s trading started in the upside and was sustained throughout the session, despite oscillating on position taking in blue chip companies and others, while selloffs hit some stocks. This situation pushed the NGX’s index to an intra-day high of 98,340.10bps from its lows of 98,043.02bps, before closing sightly above its opening level at 98.206.97bps.

Market technicals were positive and strong with higher volume when compared to the previous session in the midst of breadth favoring the bulls on a mixed sentiment as revealed by Investdata’s Sentiments Report showing 55% buy position and 45% sell volume. The total transaction volume index stood at 1.72 points, just as energy behind the day’s performance was relatively strong as Money Flow Index inched up to read 55.21pts, from the previous day’s 52.00pts, indicating that funds entered the market.

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Index and Market Caps

At the end of Tuesday’s trading, the benchmark NGX All-Share Index  inched up by  96.23 basis points, closing at 98,206.97bps from 98,107.52bps, representing a 0.10% up, while market capitalization rose by N62.58.bn, at N59.53tr from the previous day’s N59.47tr, representing a 0.10% value gain.

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The upturn was driven by buying interest in the shares of Conoil, SterlingNG, Oando, Accesscorp, MTNN, FCMB, Nestle, International Breweries and Tantalizer, among others. This impacted mildly on Year-To-Date gain as it inched up to 31.34%, while Market capitalization gain stood at N15.12tr, representing 45.45% growth over its opening level for the year.

Mixed Sector Indices

Sectoral performance indexes were mixed as the NGX Industrial Goods and Banking index closed 0.84% and 0.20% lower respectively, while the NGX Insurance index led the advancers after gaining 1.98% followed by Energy and Consumer goods with 1.64% and 0.17% respectively.

Market breadth turned positive, as gainers outnumbered losers in the ratio of 37:21, while transactions in volume and value were mixed after investors exchanged 939.41m shares worth N12.81bn. Volume was driven by trades in Wapic Insurance, SterlingNG, Japaul Gold, UBA and MTNN.

Golden Breweries and Guinea Insurance were the best performing stocks, gaining 9.93% and 9.80% respectively, closing at N6.53 and N0.56 per share respectively on the back of sentiment and market forces respectively. On the flip side, JohnHolt and HMcall lost 10% and 9.90% respectively, closing at N7.23 and N5.27per share, purely on profit taking and selloffs.

Market Outlook

We expect volatility to continue as bargain hunters take advantage of pullbacks, while rebalancing their portfolios midst of profit taking, low valuation and position taking by smart money for year-end. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of pullbacks and correction to buy into value.

This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.

Ambrose Omordion

CRO|Investdata Consulting Ltd

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

08028164085