Market Update for January 10
Again, profit taking resurfaced on the Nigerian bourse as mixed session continued on Tuesday after two days of back-to-back gains, following which the market closed lower in the midst of positive breadth and yet another spate of selloffs in telecom giant= Airtel Africa. This was enough to weigh down the benchmark All-Share index on a high traded volume.
As mentioned in our previous report, market recovery at this level is forming a topping chart pattern, looking at recently price structure, which signaled a possible correction, or pullback on the NGX index action as reflected in Tuesday’s session to stay above the T-Line, waiting for confirmation at midweek’s session to know the next market direction. Meanwhile, more companies continue to notify the exchange of their closed period and board meetings.
Market players are looking forward to the December consumer price index and Q4 GDP reports that could possibly shape or influence the outcome of Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting later this month, as well as unaudited Q4 financials. This is likely to drive the ongoing volatility in the face of the usual January effect that had been positive in the previous years and this month so far.
Investdata News recalls that the CBN hiked its benchmark Monetary Policy Rate at each of MPC meetings since May 2022 in a bid to arrest imported inflation that has been propelled by the aftermath of the rating Russia- Ukraine war, which began on February 24. At the end of the year, the apex bank raised MPR by a cumulative 500 basis points to 16.5% from 11.5% in May.
However, the World Bank Group in its latest Global Economic Report released on Tuesday, January 10, 2023, warned of an imminent global economic recession, just two years after the last one. It based its warning on the subsisting fragile economic conditions in many economies of the world. Any new adverse development such as higher-than-expected inflation, abrupt rises in interest rates in a bid to contain it, a resurgence of the COVID-19 pandemic, or escalating geopolitical tensions, the report noted, could push the global economy into a recession, which it added, “would mark the first time in more than 80 years that two global recessions have occurred within the same decade.”
The mixed market sentiment and strong momentum across the major sectors of the market continued to support the recovery as revealed in the short, medium and long term trend, despite the pullback witnessed on Tuesday. This volatility and recovery are likely to continue further due to the expected full-year earnings and corporate actions that would support prices in the face of uncertainties associated with the coming 2023 general elections, and a possible post-election rally, all things being equal. This is despite any possibility of postponing the elections, which has been a pattern in the last two elections in 2015 and 2019.
With the NGX’s historical peak of an earnings reporting season and dividend rewards drawing closer, it is expected to attract more liquidity and buying power, depending on earnings surprises and disappointments. Also, as the rates and yields in the fixed income market have been on the decline across all tenor, judging by the outcome of the last Treasury Bills’ Primary Market Auction offer for 2022, and the first savings bond rates in the New Year also declining.
Technically, the NGX index action is at distribution phase in the face of a topping chart and bullish V-shape pattern that supports reversal or continuation of trend on a daily chart, as the signal line is closing up and MACD histogram is declining supports pullback or end of the bullish run, in the midst of profit taking that hit some telecoms, consumer goods and insurance stocks. let us keep our gaze on market forces and money flow.
Momentum indicators at the end of Tuesday’s trading appeared to remain stronger, as revealed by the ADX reading 64.46, just as, RSI and Money Flow Index are looking down to read 73.83 and 82.10 points against the previous session 78.33 and 90.61 points respectively. Volume trading pattern suggests the gradual return of many players who had been seating on the fence before now, including institutional investors holding cash to confirm the primary’s market direction, especially given the anticipated financial market and economic reset in 2023, that comes with huge opportunities to create wealth for smart investors and traders.
To navigate the rest of the month and quarter profitably using fundamental and technical analysis to run, join investdata 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 range market. Despite the low volume of transaction witnessed, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.”
Oil price oscillation continued, staying below $80 to trade at $79.45 per barrel on increasing fear of demand, as huge unexpected inventory builds in the midst of China reopening its borders and Covid 19 cases management. Just as the geopolitical tension and fear of recession as a result of high interest rate and inflation across the globe. Also, supply tightened due to the Russia-Ukraine war that has lingered so far. The up and down movement of oil price also continues to drive volatility.
Meanwhile, Tuesday’s trading opened in the upside before pulling back on profit taking in some highly priced stocks, medium and low cap companies, a situation that pushed the NGX’s index to an intraday low of 51,220.23 basis points from its highs of 51,712,97bps before closing below its opening level at 51,446.60bps.
Market technicals were positive and mixed, with higher volume of trade compared to the previous session in the midst of breadth favoring the bulls on mixed sentiment as revealed by Investdata’s Sentiments Report showing 46% buy position and 54% sell volume. The total transaction volume index stood at 1.63 points, just as momentum behind the day’s performance was strong as Money Flow Index looked down at 82.10pts, from the previous day’s 90.61pts, indicating that funds left the market.
For you to successfully invest and trade in this volatile market in 2023, order for Investdata’s video on Buy & Sell Technical Analysis Toolbox to navigate the volatile market profitably, enhance trading decisions and boost your bottom line. Also, to up your game in stock trading and investing, understanding the key to trading price and index action will go a long way to make the difference in your trading results, check out the video materials below.
Index and Market Caps
At the end of Tuesday’s trading, the composite NGX All-Share index shed 246.48 basis points, closing at 51,446.60bps after opening at 51,700.36bps, representing a 0.49% decline, just as market capitalization fell by N138.21bn closing at N28.02tr from the previous day’s N28.16tr, which also represented a 0.49% value loss.
Attention: If you have not signed up for INVESTDATA’s buy and sell signal setup, don’t delay, because the number of stocks entering their buying range has just increased to 30 as they build a new bullish base and positive chart patterns to be on our watchlist. These stocks have double the potentials to rally, considering their earnings prospects and the oscillating moves in a recovery market and economy.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy that can stimulate and re-track the economy to the path of growth and development.
The session’s downturn was driven by selloffs in the shares of Airtel Africa, Champion Breweries, NEM Insurance, NPF Microfinance, UACN, NGXGroup, UPDC and Honeywell Flour Mills, among others, which impacted negatively on Year-To-Date return of 0.38%. Market capitalization YTD gain stood at N208.37bn, representing 0.38% above its opening level for the year.
Mixed Sector Indices
Sectorial performance indexes for the session were mixed, as NGX Insurance and Consumer goods closed lower by 1.75% and 0.11% respectively, while NGX Industrial goods led the advancers after gaining 1.54%, followed by Banking with 0.07%.
Market breadth was positive as gainers outnumbered losers in the ratio of 18:16; whereas activities in volume and value were higher, after investors exchanged 345.49m shares worth N8.29bn. Volume was driven by trades in FBNH, BUA Cement, Zenith Bank, Fidelity Bank and Transcorp.
Thomaswy and Mutual Benefits Assurance were the best performing stocks, after gaining 9.43% and 7.14%, closing at N1.16 and N0.30 per share respectively on market forces. On the flip side, NEM Insurance and Champion Breweries lost 10% and 9.58% respectively, closing at N4.05 and N4.34per share, purely on profit taking.
We expect mixed sentiment and trend on profit taking as investors position for dividend income ahead of inflation data, MPC meeting and volatility in the face of Q4 earnings reports and election uncertainty, a pullback at this point add more strength to upside potential as revealed by weekly chart. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
As the new year begins, you need to get started with activities that will help you in achieving your goals for the year. To this end, I must tell you that events and activities that happened in 2022 will shape 2023.
As a result, it is only investors who have improved on their skills and knowledge that will be able to scale through and withstand circumstances beyond their control in the market.
However, we want all to benefit from what 2023 investment has to offer.
As a result, the management have met and decide to assist everyone who have been following InvestData Consulting Limited to participate and secure your portfolio starting from Now through participating in the *InvestData Live Session Jumbo pack.*
*This is not new because I have been talking about it for the Past 6 months*
This Consist of the following…
- Access to NGX Q&A Class with Ambrose Omordion
- Access to the NGX Q&A Class with Ambrose Omordion Replay.
- Access to the Past NGX Q&A Class with Ambrose Omordion Replay
- Access to Weekly Stock Pick.
- Access to Buy and sell signal
- Access to the Daily Live Academy Class
It all goes for N50,000 and it is for one year.
Simply put, if you want to participate in the 2023 NGX Class with Ambrose Omordion starting this Saturday then get your InvestData Live Session Jumbo pack now before it is too late.
Or else you won’t be able to have access to the above benefits starting from Saturday 7th January, 2023
Decide now if you are in or out…
Because an investment in your stock and general market knowledge pays the best interest.
Please Pay N50,000 into InvestData Consulting Limited Zenith Bank 1013815737. After Payment Send the details of your payment including name, email address and phone number to 08028164085 to have your access sent to you.
CRO|Investdata Consulting Ltd
Tel: 08028164085, 08179547605