Market Update for April 22
Trading resumed on the Nigerian Exchange on a positive note after the Easter holidays in the midst of de-escalating trade tariffs and downgrading of global economic outlook by the International Monetary Fund, which also projected that the US economy could slowdown to as low as 1.8% from 2.7%. Despite this, stock markets across the globe, as well as the U.S Dollar rebounded on the back of the backtrack by Trump, bringing some well deserved relief to the market after the selloffs that dominated mature markets before now, especially US which had witnessed outflow of capital.
The increased position taking on the NGX weighed positively on the composite NGX All-Share Index as it closed higher on a buying sentiment in the face of low traded volume and expanded market breadth. Also, market players are taking advantage of the ongoing markdown for dividend as announced, amid expectations of Q1 corporate numbers, and mixed earnings from the brewing companies which triggered buying interests in that industry.
The Q1 reports from Nigerian Breweries Plc signals a gradual turnaround, following the drop in FX losses during the period drop, as it returned to profit, after the negative earnings of 2024. International Breweries, one of NB’s rivals in the alcoholic and malt beverages, was on a strong bid even despite an increase in the company’s loss position at the end of the 2024 financial year.
All eyes are on the unfolding events globally with regard to the impact of the U.S trade policy on the world economy, even as negotiations are ongoing to find a lasting solution to a problem that has already triggered a shift in global trade order. This problem is, however, a plus for some emerging economies like Africa, among others provided the right steps are taken.
The extension of the NGX’s rebound is a sign that strength is coming back to the market ahead of more Q1 earnings reports, as investors and traders continue to navigate and watch the trend to take advantage of the seeming uptrend on the strength of listed companies’ performance. Investors continue to target fundamentally sound stocks as they position in value and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting.
However, the changing global economic fundamentals and shift in trade pattern will definitely boost some economies across the globe and impact negatively on others even when trump backs down. It is therefore time for our economic managers and governments to rethink their fiscal and monetary policies if they are to drive and sustain growth in the nation economy, even as the recent oscillation and recovery are creating opportunities to buy in value and reshuffle your portfolios in today market.
The accumulation and markup phase of the market and some major sectors revealed opportunities, as players target dividend income and capital gain. This is because the market is still at its oversold region, even as it’s retracing up in the midst of sector rotation, consolidation moves in some industries and expectations of more positive quarterly numbers any moment from now. These numbers will give a clear direction, if the earnings reports beat expectations.
Technically, money flow and other momentum tools are up, revealing that funds entering the market and returning of strength that presents opportunities to buy low and sell high in the midst ongoing volatility and buying sentiment. The index inched higher on buying sentiment and position taking, thereby creating the perfect setup for high probability of continuation to catch dividend season and Q1 numbers to reposition at the right price. Just, the index crosses the T-line to close above it but still below the two moving averages of 50-EMA and 50-SMA, even when it signaled recovery in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market pulse as revealed by candlestick formation and momentum indicators, shows that the ADX is flat to read 25.45 points, while RSI and Money Flow Index were up at 45.75 and 51.77 points against the previous session’s 39.35 and 45.01 points respectively. At this state of the market, players should watch the trend and trade wisely in the face of funds flowing into the market on a buying sentiment in some sectors and profit taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are watching amid players revaluing the market and short-term opportunities, looking at economic events in the face of policy direction of the government that look inconsistent and global economic outlook in the face of Trump backtracking and market relief.
To navigate the rest of Q2 and beyond profitably, it is important to run with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday’s trading session “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 pullbacks. Despite the oscillating volume of transaction witnessed in recent time, it is time to position in undervalued stocks, sectors and the next insider playing opportunity.
Oil prices on Tuesday rebounded to continue its oscillation, as it trades at $69.10. per barrel, in the midst of Iran sanctions and US crude inventory dropping, even as US-Russia peace talk and ceasefire in Ukraine remains on shaky grounds. The trade tariffs negotiations and Trump backtracking will continue to drive sentiment and global economic activities, just as geopolitical tensions across many economies remain a major source of concern to the global economy and energy consumption in 2025. This trend may likely continue, while the up and down movement continues to drive volatility.
Meanwhile, Tuesday’s trading started in the green and was sustained throughout the session, despite oscillating on position taking in consumer goods and financial stocks, amid profit taking in other companies. This pushed the NGX’s index to an intra-day high of 104,788.09bps from its lows of 104,229.80bps, before closing sharply above its opening level at 104,745.00bps.
Market technicals were strong and mixed with lower volume when compared to previous session in the midst of breadth favoring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 92% buy position and 8% sell volume. The total transaction volume index stood at 0.70points, just as momentum behind the day’s performance was relatively strong as Money Flow Index inched higher to read 51.77pts, from the previous day’s 45.01pts, indicating that funds entered the market.
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Index and Market Caps
At the end of Tuesday, the NGXASI gained 511.17 basis points, closing at 104,745.00bps from 104,233.81bps, representing a 0.49% growth, while market capitalization rose by N321bn, at N65.82tr from the previous day’s N65.50tr, representing a 0.49% value gain.
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The upturn was driven by position taking in the shares of International Breweries, NG, Accesscorp, UBA, Zenith Bank and Cornerstone, among others. This impacted positively on Year-To-Date gain which inched up to 1.76%, while Market capitalization gain stood at N5.09tr, representing 4.87% increase over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were up, except for NGX Oil & Gas index that closed lower with 0.11%, while the NGX Consumer Goods index led the advancers after gaining by 2.57% followed by Insurance, Banking and Industrial goods with 2.16%, 0.71% and 0.09% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 40:19, while activities in volume and value were down, after investors exchanged 353.28m shares worth N7.20bn, with volume driven by trades in Accesscorp, Fidelity Bank, Chams, Universal Insurance and Zenith Bank.
International Breweries and NB were the best performing stocks, gaining 10% and 9.94% respectively, closing at N6.05 and N39.88 per share respectively on the back of sentiment and positive Q1 numbers. On the flip side, IEI and NSL Tech lost 9.46% and 8.93%, closing at N1.34 and N0.51 per share, purely on profit taking.
Market Outlook
We expect mixed sentiments to continue on bargain hunting and expectation of more Q1 earnings reports in the midst of profit taking and portfolio reshuffling, even as few audited accounts are expected to hit the market with dividend announcement. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price 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
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
