Market Update for April 3
Another seesaw movement resurfaced on the Nigerian Exchange on Thursday with mixed sentiment clouding the market which side trended, following which the benchmark NGX All-Share index closed slightly in the green, halting the previous loss. Market players continue to digest the recent corporate earnings and dividend announcements, even as few companies make precent their numbers, just as Oando notified the exchange of a delay in publishing its 2024 audited accounts.
The mixed sentiment on a low traded volume in the midst of negative breadth and NGX consolidating are creating buy opportunities. However, a breakout of the value area signals the possibility of either an uptrend or pullback that support higher dividend yields, which are targets of income investors.
We also note the added impact of the global trade warfare in the ongoing volatility, and the fact that it will definitely make some economies across the globe and mar some others. It is therefore time for economic managers and government to rethink their fiscal and monetary policies if they are to drive and sustain growth in their domain, so, the sideway movement of the market creates opportunities to buy in value and reshuffle portfolios in the mature markets and in our market today.
The distribution phase of the NGX provides opportunity for market players to target dividend, using the qualification and markdown dates to play the market, as pullbacks will impact dividend yields positively as mentioned earlier and provide room for higher upside that support capital gain. This is because the market is still at its oversold region that supports retracement in the midst of sector rotation, consolidation moves in some industries and expectations of positive quarterly numbers in the new month.
Technically, money flow and other momentum tools are mixed, revealing gradual return of strength that present opportunities to buy low and sell high in the midst ongoing volatility and selling sentiment. The index inched lower to signal profit taking, thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, the index trades on top of the T-line but below two moving averages of 50-EMA and 50-SMA, this indicates recovery in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market pulls, as revealed by candlestick formation and momentum indicators, shows that ADX is looking down to read 19.48points, while RSI and Money Flow Index were mixed at 45.32 and 48.26 points against the previous session’s 45.59 and 42.29 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds coming back to the market on a mixed sentiment in some sectors and position 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 trade war uncertainty and geopolitical tension.
To navigate the rest of Q1 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 pulled back on Thursday to continue its oscillation, trading at $70.10 per barrel in the midst of Trump’s tariffs and OPEC production hike, even as the US-Russia peace talk and hopes of a ceasefire in Ukraine is still shaky. Trade war uncertainty remains a driver of sentiments and global economic activities. The geopolitical tension across many economies remains a 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, Thursday’s trading on the NGX started in the upside, before pulling back to oscillate for the rest of the session on buying interest in insurance stocks and others, while selloffs continued in other sectors. This situation pushed the NGX’s index to an intra-day high of 105,656,10bps from its lows of 105,446.10bps, before closing slightly above its opening level at 105,525.26bps.
Market technicals were mixed and weak with lower volume when compared to the previous session in the midst of breadth favoring the bears on a mixed sentiment as revealed by Investdata’s Sentiments Report showing 38% buy position and 62% sell volume. The total transaction volume index stood at 0.80points, just as energy behind the day’s performance was weak as Money Flow Index inched up to read 48.26pts, from the previous day’s 42.29pts, indicating that funds entered the market.
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Index and Market Caps
At the end of Thursday’s trading, the NGXASI inched up by 11.43 basis points, closing at 105,525.26bps from 105,515.90bps, representing a 0.01% up, while market capitalization fell by N30bn, at N66.16tr from the previous day’s N66.19tr, representing a 0.05% value loss, due to delisting of Midview Airline, Goldlink and Capital Oil.
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The upturn was driven by buying interest in the shares of Mansard, Transcorp Hotel, SterlingNG, Wema Bank, Africa Prudential, Zenith Bank and Guinea insurance, among others. This impacted positively on Year-To-Date gain that inched up to 2.52%, while Market capitalization gain stood at N6.21tr, representing 5.41% increase over its opening level for the year.
Bearish Sector Indices
Sectoral performance indexes were down, except for the NGX Insurance that closed higher by 1.70%, while the NGX Consumer goods led the decliners after losing 0.66%, followed by Banking, Energy and Industrial goods with 0.36%, 0.19%and 0.02% respectively.
Market breadth was negative as losers outnumbered gainers in the ratio of 32:20, while activities in volume and value were down after investors exchanged 397.12 million shares worth N8.74bn. Volume was driven by trades in Universal Insurance, Zenith Bank, Royal Exchange, UBA and Fidelity Bank.
Africa Prudential and Guinea Insurance were the best performing stocks, gaining 9.76% and 9.52% respectively, closing at N15.75 and N0.69per share respectively on the back of sentiment and market forces. On the flip side, Livestock Feeds and PZ lost 10% and 9.97%, closing at N7.20 and N33.40per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiment to continue, as players digest earnings reports and target fundamentally sound stocks with strong earnings power and high payout, even as bargain hunting, profit taking and portfolio reshuffling persists. A few more earnings are expected to hit the market with dividend announcement in the coming days, while sector rotation and portfolio rebalancing continue 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
