Market Update for May 7
The bull-run on the Nigerian Exchange continued at the midweek on demand for stocks with earnings momentum among the mid to large companies in the midst high traded volume and strong market internals that pushed the benchmark indicators higher with the composite All-Share index testing 109,017.10 basis points, before sliding marginally but remaining in the markup phase of the market structure and context. This buying sentiment across some major sectors of the market reflects interests and confidence on the earnings power of companies on the exchange, given that every investment is against the future. Already these corporate numbers are pointing to where the companies are heading in this 2025 financial year in the midst of global uncertainties and opportunities, even as sector rotation and portfolio rebalancing will continue on the NGX.
The first four trading sessions in May have been positive, signaling the power of liquidity in any market, especially at a time of dividend payment as shareholders of many companies continue to okay directors’ recommendation, as well as stronger Q1 numbers that boosted investors confidence. Also, the historical trend of May defying the trade mantra of sell in May and comeback in October, as NGX had recorded 18 times of positive close in the past 27 years and down just 9 times. This trend is likely to repeat itself as more audited accounts are expected especially March financial year-end and payment of dividend declared to support funds flowing into the market as investors reinvest their dividends.
This position taking in different sectors of the market and across all classes of stocks including low, mid and high cap revealed change of waves continued to attract players to the market. As all eyes are still observing keenly the unfolding events globally as regard 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 NGX index again broke out the strong resistance level of 108.816.90 on a very high traded volume to support this uptrend, as investors needs to confirm continuation after index had tested 109,017 in the face of buying sentiment and expected profit taking. As players continue to navigate and watch the trend to take advantage of likely uptrend on the strength of companies’ performance. Investors should 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. 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 are up, revealing that funds entering the market and strength that presents opportunities to buy low and sell high in the midst ongoing volatility and buying sentiment. As the index closed 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 as, the index trades above T-line and the two moving averages of 50-EMA and 50-SMA, that revealed recovery and strength in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market metrics revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 20.12 points, while RSI and Money Flow Index were up at 71.80 and 76.85points against the previous session’s 74.46 and 77.47 points respectively. At this state of the market, players should watch the trend and trade wisely in the midst of funds entering 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 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 inched up to continue its oscillation, as it trades at $62.58per barrel, in the face US-China trade talks becoming clearer and OPEC moves to hike production in the coming months. Even as recession narrative remain a concern, as US-Russia peace talk and ceasefire in Ukraine remains on shaky grounds. The trade tariffs negotiations and white house rumor 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.
Midweek trading session opened in the upside and it was sustained throughout the session, despite profit taking in some stocks and buying interest in others stocks. This pushed the NGX’s index to intra-day high of 109,017.10bps from its lows of 108,356.80bps, before closing above its opening level at 108,849.83bps.
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 sentiment as revealed by Investdata’s Sentiments Report showing 97% buy position and 3% sell volume. The total transaction volume index stood at 1.24points, just as impetus behind the day’s performance was strong as Money Flow Index inched higher to read 77.47pts, from the previous day’s 76.85pts, indicating that funds entered the market.
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Index and Market Caps
The NGXASI, at the close of the session trading gained 488.73 basis points, closing at 108,849.83bps from 108,361.50bps, representing a 0.45% growth, while market capitalization rose by N307.2 billion, at N68.41tr from the previous day’s N68.11tr, representing a 0.45% appreciation in value.
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Meanwhile, the upturn was driven by position taking in Ecobank Transnational, Nigerian Breweries, International Breweries, Accesscorp, Zenith Bnak, Dangote Sugar GTCO, Wapco, Ucap and Wema Bank, among others. This impacted positively on Year-To-Date gain which inched up to 5.76%, while Market capitalization gain stood at N8.12tr, representing 8.72% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, as the NGX Energy and Insurance index closed 0.18% and 0.15% lower respectively, while the NGX Banking index led the advancers after gaining 2.21% followed by Consumer goods and Industrial goods with 2.11% and 0.15% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 50:15, while transactions in volume and value were up, after investors exchanged 587.47m shares worth N18.16bn, with volume driven by trades in GTCO, Tantalizer, Fidelity Bank, Zenith Bank and NB.
Meyer and Beta Glass were the best performing stocks, gaining 10% and 9.98% respectively, closing at N8.80 and N146.05 per share respectively on the back of sentiment and impressive numbers. On the flip side, Deapcapital and Linkage Assurance lost 10% and 6.61%, closing at N1.08 and N1.13per share, purely on selloffs and profit taking.
Market Outlook
We expect the mixed sentiments on continue bargain hunting, sector rotation and profit taking, as investors buy into value in expectation of more corporate 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
