Mixed Sentiment, Mild Bull-Run, Bargain Hunting Ahead, But Eyes On Sept. Inflation, Q3 Earnings Reports
Market Update for the Week Ended October 3 and Outlook for October 6-10
The Nigerian Exchange defied the expectation of a bearish September as it closed in green in the last month of Q3, extending five consecutive months of bull transition on the back of a shift noticed in market fundamentals, investors sentiments and confidence. Similarly, the week under review closed higher amid positioning and portfolio reshuffling ahead of the Q3 earnings reporting season and for fiscal year ended December 31, 2025.
October being one of the most consistently positive months on the NGX, has started the last quarter of the year on a positive note ahead of early filers of Q3 corporate earnings expected to start hitting the market as from mid-month. These are expected to give insights into what the market should look forward to at the end of the current financial year.
However, ahead of the expected Q3 numbers, this is the time for market players to rebalance their portfolios after many stocks hit new highs before pulling back, looking at sector rotation and companies’ valuation. This should be regular for traders and investors to stay on top of the market and their portfolios because market and stock prices oscillate up and down. As the NGX climbs, many of your holdings will occupy a larger percentage of your portfolio, reducing your diversification and increasing your risk. As such, you may take some profits and move that money into different investment classes. Likewise, wen the NGX suffers a decline, you may want to add to your portfolio some positions that are selling at a discount.
It was a bull run on the Nigerian Exchange in the first short trading week of October, extending the previous week gain in the wave of rekindled buying interests in blue chip companies. This was due to the positive sentiment, recent rate cut by the Central Bank of Nigeria and increased volatility with bargain hunters taking advantage of fairly priced stocks ahead of the release of the September Consumer Price Index and expected positive statements from the fiscal or monetary authorities.
Despite the intraday oscillation witnessed during the period, the NGX index’s action remained on its recovery and trendy mode to breakout 143,000 psychological line again, ahead of the resistance levels of 144,990 and 145,300 basis points. Meanwhile, all eyes are on the seasonality associated with the last quarter of 2025 in the midst of the disinflation environment and rate cut by the CBN which had continued to influence portfolio repositioning and circular flow of fund.
The benchmark NGX All-Share index remained above the T line on a daily and weekly time frame to reflect a markup phase, amid buying interest in low, mid and highly priced stocks. These pushed the market higher in the midst of a continued oscillation in transaction volume pattern, further confirming the wait-and-see attitude of market players, who are on the lookout for the Q3 macroeconomic numbers and corporate earnings, in the face of a recovery and growth economy as revealed by positive macroeconomic indices.
Stock prices across the major sectors of the market witnessed a rebound, including some large cap stocks and blue-chip companies which reflected on the weekly advancers/decliners ratio, while position taking hit oil stocks and others, It is noteworthy that recent earnings from the banking sector and others revealed the undervalued state of the market and individual stocks, amid expectations that the prevailing low Price to Earnings ratios and divergence in real value and current market prices could upside potential.
Movement Of NGXASI
Of the four-trading sessions of the week, following the declaration of Wednesday, October 1, as public holiday to mark Nigeria’s 65th independent anniversary, the NGX index had a bullish performance for the period, as major sectors and blue-chip stocks rebounded, driving the uptrend that create opportunities for players to reposition their portfolios, amid interpretation and analyses of the prevailing macroeconomic conditions and expected Q3 earnings inflow.
The week’s trading started on a positive note, extending the previous session’s gain, by 0.17%, followed with the index inching higher by 0.21% on Tuesday. This trend continued on Thursday with 0.19% after the midweek holiday and finished higher on Friday with a gain of 0.42%, bringing the week total gain to 1.02% extending the week positive position of 0.20%.
Cumulatively, the NGX All-Share Index rose by 1,451.01 basis points, closing at 143,584.04bps, compared to the week’s 142,133.03bps opening level, after touching an intra-week high of 143,630bps and a low of 142,069bps.
Market capitalisation also rose by N1.2 trillion to N91.14 trillion, representing 1.31% appreciation in value during the period. The different in percentage growth followed the listing of 14.14 billion shares of Wema Bank Plc at N10.45 per share, translating to N147.763 billion boost.
During the period under review, the advancers’ table was dominated by medium and large cap stocks amid the position taking that hit high priced stocks due to volatility and positive sentiments. Also notable is the fact that investors are taking advantage of the price correction to buy into value and high dividend yield companies.
Market breadth during the week turned positive as gainers outnumbered losers in the ratio of 53:43 on buying sentiment as revealed by investdata sentiment report showing 97% ‘buy’ volume and 3% sell position. Growth in Money Flow Index was flat at 83.09bps from the previous week’s 83.15 points, an indication that funds left the market slightly on a weekly chart, despite the up market.
NGXASI Weekly Chart
The NGX index’s action continued in its markup phase, as the index trends higher on the weekly and daily time frames, with low and mixed volume traded, signalling a trading opportunity, while sector rotation continued on a weekly chart above the T line on a buying sentiment and strong momentum. This market remains relatively strong in the midst of increased volatility and fund entering equity space. We note also that the index is trading above the ‘T’ line and 50-day moving average on the weekly time frame to signal possibility of continuation or reversal, which the state of Q3 financials and September consumer price index will determine.
Bullish Sectoral Indices
The sectorial performance indexes were in the green, except for NGX Insurance index that closed lower by 2.02%, while the NGX Oil and Gas led the advancers’ after gaining 5.68%, followed by Industrial Goods, Banking and Consumer goods with 1.66%, 1.17% and 0.13% respectively.
Transactions in volume and value were mixed, as investors exchanged 8.40bn shares worth N115.50bn, compared to the previous week’s 7.68bn units valued at N494.13bn. Volume was driven by Financial Services, ICT industry and Consumer goods. Volume was boosted specifically by trading in Cornerstone Insurance, Fidelity Bank, UBA, Wema Bank and CWG.
Eterna Plc and Nigerian Enamelware were the best-performing stocks for the week, gaining 32.80% and 20.94% respectively, and closing at N37.05 and N42.45per share on sentiment and market forces. On the flip side, Julius Berger and IEI lost 17.79%and 11.08% respectively, at N122.90 and N2.97 per share, purely on profit taking and selloffs.
Outlook for the week
We expect mixed sentiment and mild bullish market performance on bargain hunting opportunities and revaluation of equities, ahead of September inflation report and Q3 earnings reporting season. However, retracement to the 142,836bps level and below is possible on profit taking as global and domestic events unfold.
Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08179547605
