Expect Mixed Sentiments On Corporate Actions, Bargain Hunting, Ahead Of Q3 Filings, MPC Outcome

Market Update for September 18

The rekindled buying interest amidst the bearish divergence on the Nigerian Exchange continued Monday to open the week on a positive note, thereby extending the bull run for the second successive session on price appreciations in high cap stocks and blue chips. This pushed the benchmark NGX All-Share index higher on a less than average traded volume and positive market breadth, confirming the return of strength to the market after selloffs and profit booking.
The latest macroeconomic reports such as inflation hitting eight-month high at 25.8% in the midst of unclear rates and yields direction in the fixed income market that triggered inflow of funds into the equity space in search of safety in dividend stocks and capital gain. This helped investors to hedge against inflation as factors putting pressure on prices continued to increase.
The financial sector has shown resilience all these while due to the high quality assets management and consistent profitability that has supported steady reward for shareholders in form of dividends. The share price of UBA has so far rallied for four consecutive sessions on the back of its impressive half-year earnings and higher interim dividend payout that have so far supported it price on the exchange.
As such, it is important that we trade and invest wisely ahead of events and factors that will shape the market in the final quarter of this year. The bullish momentum witnessed in recent trading sessions, and the market’s big uptrend remains intact as investors await the scorecards of Accesscorp, AXA Mansard and CHI Plc and interim dividend announcements. Other factors include the outcome of next week’s Monetary Policy Committee meeting amidst material shift of the index and the ongoing volatility.
In the midst of all these, investors should trade consumer and industrial goods with caution while repositioning their portfolios, the targeting services industry stocks with strong fundamentals and earnings power capable of supporting price and higher dividend payment at the end of the year. These are against the backdrop of the changing market conditions and trading environment due to macroeconomic headwinds, mixed corporate earnings and the prevailing mixed outlook for fixed income instruments yields and rates in the face of rising inflation, high interest rate and exchange rate challenges due to the high volatility in the exchange.
The NGX All-Share index action rebounded to trade in the consolidation range, while above the T line that signaled accumulation phase that indicates buy market. However, let us wait to confirm direction on Tuesday. The candlestick formation at the end of the session signaled a bullish pattern that support a new uptrend, just as the 2008 resistance level turn another strong support level to watch.
To navigate the rest of the quarter and year profitably using fundamental and technical analysis, join investdata’s live sessions at noon every trading day “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 selloffs. Despite the mixed volume pattern witnessed in recent days, it is time to shop for undervalued stocks, sector rotation, go for defensive stocks at the next insider playing opportunity.
Oil price oscillation continued, as it rebounded sharply to trade at 2023 high of $94.99 per barrel in the midst of production cuts by Saudi Arabia and Russia pushing prices, whereas global demand is still shaking on slow economic growth and activities. The Russia-Ukraine war remains a major concern, the prevailing high interest rate regime and slowing inflation. Also, supply tightened due to the Russia-Ukraine conflict that entered the second year. This up and down movement in oil price, has continued to drive volatility across markets.
Monday’s trading opened in the green and was sustained for the rest of the session on position taking in banking, consumer goods, insurance and others during the session. This pushed the Index to an intraday high of 67,880.03bps from its lows of 67,395.74bps, before closing above the opening figure at 67,877.17bps.
Market technicals were positive and mixed with a higher volume traded when compared to the previous session in the midst of breadth favoring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 99% buy position and 1% sell volume. The total transaction volume index stood at 1.15 points, just as the momentum behind the day’s performance was strong, with Money Flow Index reading 66.94pts, from the previous day’s 66.57pts, indicating that funds entered the market.
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Index and Market Caps
The key performance NGXASI, at the end of Monday’s trading gained 481.43bps, closing at 67,877.17bps, from its 67,395.74bps opening level, representing a 0.71% growth. Market capitalization also rose by N263.5bn to N37.15tr, from the previous day’s N36.89tr, which also represented a 0.71% value gain, with the market seeming neutral over last weekend’s sacking of the CBN’s Board of Governors.
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Meanwhile, the upturn was driven by buying interests and accumulation in the shares of Airtel, Oando, Stanbic IBTC, UBA, GTCO, Zenith Bank, Accesscorp, Chams, Chi Plc and Mansard, among others. This impacted positively on Year-To-Date gain which increased to 32.44%, while Market Capitalization YTD gain stood at N8.24tr, representing a 35.36% rise above its opening level for the year.

Mixed Sector Indices
Sectoral performance indexes were mixed, as NGX Energy and Industrial goods closed lower by 0.38% and 0.06% respectively, while NGX Banking led the advancers after gaining 1.43%, followed by Consumer goods and Insurance with 0.16% and 0.14% respectively.
Market breadth was positive with gainers outnumbering losers in the ratio of 29:26, while transactions in volume and value were up after investors exchanged 515.28m shares worth N8.96bn, driven by trades in UBA, Universal Insurance, Transcorp, Accesscorp and Chams.
Chams and Oando were the best performing stocks, gaining 10% each, closing at N1.21 and N12.10 per share respectively, on market forces and sentiments. On the flip side, Omatek and SkyWave Aviation lost 10% and 9.9% respectively, closing at N0.36 and N25.35 per share, purely on the back of selloffs and profit taking.

Market Outlook
We expect mixed sentiments to continue on corporate actions, dividend yields and bargain hunting ahead of the expected half-year earnings reports of Accesscorp and MPC meeting in the midst of portfolio reshuffling for quarter end and continued sector rotation.
However, pullbacks are creating buying opportunities amidst the economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.
We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe and domestically.

Theme Thriving In A Changing Macroeconomic Climate: Identifying Opportunities, Waves & Paths On NGX
1. Navigating Market Dynamics: Insights For Profitable Strategies- Alhaji Garba Kurfi, MD/CEO APT Securities & Funds Ltd)
2. Mastering Market Volatility: Chart & Analysis For Higher Returns- Mr Abdul-Rasheed Oshoma Momoh, Head Capital Market at, TRW Stockbrokers Ltd
3. The Power of Macroeconomic Data In Equities’ Trading & Investing- Mr Olatunde Amolegbe, MD/CEO, Arthur Steven Asset Management Ltd
4. Understanding The Link Between Fundamental, Technical and Sentiment Analyses In Picking Stocks- Mr Ambrose Omordion, CRO, Investdata Consulting Ltd.

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Time: 9AM Prompt
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Venue: ZOOM

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Ambrose Omordion
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08179547605