Market Update for May 14
The positive breath outing continued at the midweek on the Nigerian Exchange, following increased positioning across major sectors of the market in the midst of buying pressure and investors bet on expected macroeconomic reports from the country’s statistics bureau any moment from today. All eyes are also on the April consumer price index from the same agency, and a few corporate earnings that are yet to hit the market.
The composite NGX All-Share index joined its counterpart across the globe, closing higher on an above traded volume and positive market breadth, thereby extending its bull transition for the second successive session to breakout 109,000 psychological line again.
This recovery and strong momentum indicate that the NGX is set for another strong rally, if it breaks out these strong resistance levels of 109,333.10 and 109,850.80 basis points on a high volume, as more stocks make new 52-week highs in the midst of better-than-expected earnings released by these companies and positive technicals as revealed by sentiments and other technical tools. The NGX’s uptrend in the midst of buying sentiment and expectation of economic reports like the Q1 2025 GDP report, April Consumer Price Index and this month’s Monetary Policy Committee meeting of the Central Bank of Nigeria, all of which together signal a systematic positioning, wait-and-see attitude among market players in the midst of sector rotation and portfolio rebalancing into growth and defensive stocks.
There is also the fading recession uncertainty at the global level had trigger positive sentiment again for Africa markets, with trade war tension gradually cooling off with the recent move by the US and China to lower tariffs and allow for a 90-day negotiation period. The U.S already a signed trade deal with the UK. The stocks with earnings momentum have been the attraction of market players, especially investors, while traders continue trading the momentum, price action and market structure while timing their trades for entry and exit amid continuing portfolio rebalancing on the exchange.
As funds continue to flow into mid and highly capitalized stocks, market players should continue to navigate and watch the trend to take advantage of the uptrend and buy into value on the strength of companies’ performance and prospect, by targeting fundamentally sound companies and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting. The market is still at its recovery wave, even as it’s retracing up in the midst of sector rotation, consolidation moves in some industries and sectors.
Technically, money flow and other momentum tools were mixed to indicates funds slowing down in the face of buying momentum that presents opportunities to buy low and sell high in the midst ongoing volatility and recovery. As the index closed higher on a positive momentum and position taking, thereby creating the perfect setup for high probability of continuation to catch Q1 numbers to reposition at the right price. Just as, the index still trades above T-line and the two moving averages of 50-EMA and 50-SMA, that revealed strength in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market pules as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 24.41 points, while RSI and Money Flow Index were mixed at 69.88 and 75.97 points against the previous session’s 68.36 and 76.60 points respectively. At this state of the market, players should watch the trend and trade wisely in the midst of MFI looking down 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 gradually taking position amid revaluation of 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 tariffs policy easing.
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 at midweek slow down to continue its oscillation, as it trades at $65.92 per barrel, in the midst of US-China trade optimism and tension in Indian fading on peace move. Even as OPEC production drop for month in the face of planning to hike output. Even as US-Russia peace talk and ceasefire in Ukraine continued as Russia and Ukraine president’s plan to meet on Thursday. The trade tariffs negotiations and white house talks flying 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, midweek’s trading opened in the green and was sustained throughout the session, despite oscillating on buying interest in blue chip companies and others stocks, while profit taking in other. This situation pushed the NGX’s index to intra-day high of 109,059.30bps from its lows of 108,281.50bps, before closing above its opening level at 109,059.30bps.
Market technicals were positive and strong with higher volume when compared to previous session in the midst of breadth favoring the bulls on a buying pressure as revealed by Investdata’s Sentiments Report showing 100% buy position and 7% sell volume. The total transaction volume index stood at 1.15points, just as energy behind the day’s performance was strong, even when Money Flow Index inched lower to read 75.97pts, from the previous day’s 76.60pts, indicating that funds left the market.
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Index and Market Caps
The NGX All-Share Index at the close of trading on Wednesday gained 295.78 basis points, closing at 109,059.30bps from 108,763.30bps, representing a 0.27% up, while market capitalization rose by N185.88bn, at N68.54tr from the previous day’s N68.36tr, representing a 0.27% appreciation in value.
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The upturn was driven by position taking in Northern Nigerian Flour Mills, Oando, NB, Stanbic IBTC, Zenith Bank, Wapco, Honeywell Flour, International Breweries and UBA, among others. This impacted positively on Year-To-Date gain which inched lower to 5.94%, while Market capitalization gain stood at N8.69tr, representing 8.82% increase over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were up led by NGX Consumer Goods index after gaining 1.25% followed by Energy, Banking, Insurance and Industrial goods with 0.75%, 0.58%, 0.19% and 0.01% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 33:23, while transactions in volume and value were up, after investors exchanged 531.28m shares worth N19.81bn, with volume driven by trades in GTCO, Accesscorp, Fidelity Bank, NB and Zenith Bank.
NNFM and McNicols were the best performing stocks, gaining 10% each, closing at N99.55 and N1.76 per share respectively on the back of sentiment and market forces. On the flip side, Multiverse and Legend Internet lost 9.85% and 5.41%, closing at N9.85 and N8.40per share, purely on profit taking.
Market Outlook
We expect mixed sentiments on continued on sector rotation and expectation of April CPI. As investors take advantage of the markup phase to buy into value in expectation of more corporate earnings reports in the midst of 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
