Market Update for November 20
The bullish momentum on the Nigerian Exchange continued at midweek, as the benchmark NGX All-Share index closed on a positive note, extending its buying sentiment for the fourth successive session in the midst of low traded volume and positive market breadth. Strategic positioning in the market reveals the gradual return of institutional investors as money flow looks up with the index breaking out the 98,000 psychological line. Also, the 364-day tenored NTB inched up to 23.5% at the end of midweek’s primary market auction, while other tenors like the 91 and 182-day remained unchanged at 18% and 18.5% respectively.
Also, all eyes are on policy meeting of the Central Bank of Nigeria next week, with discerning investors and smart traders positioning ahead of year-end seasonality and dividend announcements in Q1 2025. The oscillating volume patterns signals an inflow of funds to the market and individual stocks, a situation that should guide market players as per where to position with the ongoing developments in the economy and the direction of exchange rate that have so far impacted some sectors and stocks negatively.
Managers of the economy at this point may need to rethink their strategies, or continue to trade the economy of the nation for foreign inflow with high interest rate that is driving low productivity.
The markup phase and recovery continued on the NGX, as the index formed a top chart pattern in an uptrend which needs confirmation as trading opens on Thursday. Champion Breweries notified the market of change of venue for its extraordinary general meeting. Also, Conoil updated the market of its resolutions at its AGM, while Airtel, Accesscorp and Ucap informed the investing public of its insider dealings during the session.
Meanwhile, the NGX still presents buy opportunities for investors and smart traders who understand the importance of buying low and selling high in any market condition in the midst ongoing volatility. This is particularly true now that many stocks on the NGX are undervalued with high upside potentials, while investors carryout sector rotation on the strength of economic events and quarterly earnings reports that reveal the states of various companies on the NGX. Already, many companies posted stronger Q3 numbers that show inherent value with high possibility of higher payout at the end of the current financial year as portfolio reshuffling continue in the midst of positioning for year-end seasonality and others.
The buying sentiment in the midst of bullish hammer reversal chart pattern and retracement from resistance level of 97,975.29 basis points and 98,087.12bps, after forming a bottoming-tail and hammer candle in an uptrend. This created the perfect setup for high probability of reversal or continuation to catch end of year repositioning at the right price. Also, the index is trading above the T-line and the two moving averages of 50-EMA and 50-SMA, this indicate relatively strong momentum in the midst of changing market fundamentals and technicals on the NGX and the economy.
Technically, the NGX is in a markup phase as buyers dominate in the face of recovery and buying sentiment, as candlestick formation and momentum indicators reveal a somewhat strength in the market. ADX looked up at 24.89 points, while RSI and Money Flow Index were up to read 56.53 and 31.11 points against the previous session’s 53.55 and 25.00 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds returning to the market on a buying sentiment in some sectors and profit taking in others. Also, trading volume pattern continued to oscillates, suggesting buying interest and selloffs in the market amid players studying the corporate earnings and policy direction of the government that look confused.
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Oil prices at midweek inched down to continued its oscillation, trading at $73.26 per barrel in the midst of decline in US inventory and Ukraine escalation. As OPEC remain indifferent on production policy in the face of ongoing geopolitical tensions and conflict in the Middle East. As demand outlook remained mixed in the midst of rate cuts by the major central banks of the world and OPEC unclear direction on output increase ahead of 2025. The rising geopolitical uncertainties across many economies remains a threat to the global economy and energy consumption. This trend may likely continue for the rest of 2024, while the up and down movement continues to drive volatility, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.
Midweek’s trading opened in the upside and was sustained throughout the session on position taking in blue chip companies, despite selloffs and profit booking in some stocks. This situation pushed the NGX’s index to an intra-day high of 98,242.49bps from its lows of 97,970.23bps, before closing above its opening level at 98,227.50bps.
Market technicals were positive and mixed with higher volume when compared to the previous session in the midst of breadth favouring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 94% buy position and 6% sell volume. The total transaction volume index stood at 0.87 points, just as impetus behind the day’s performance was weak as Money Flow Index inched up to read 31.11pts, from the previous day’s 25.00pts, indicating that funds are entering the market at this oversold region.
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Index and Market Caps
The NGX All-Share Index gained 255.36 basis points, closing at 98,227.50bps from 97,972.33bps, representing a 0.26% up, while market capitalization gained N166bn, at N59.53tr from the previous day’s N59.37tr, representing a 0.30% value gain. The different in the index and market cap was due to the new listing of 3.12 billion shares of Haldane McCall at N3.84
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The session upturn was driven by position taking and accumulation in the shares of Wapco, Unilever, Dangote Sugar, Honeywell, Zenith Bank, Eunisell, Mansard, Japaul Gold and JohnHolt, among others. This impacted mildly on Year-To-Date gain as it inched up to 31.37%, while Market capitalization gain stood at N15, 18tr, representing 45.34% growth over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were up, save for NGX Energy that closed lower by 0.09%, while NGX Consumer goods index led the advancers after gaining 1.09% followed by Industrial goods, Insurance and Banking with 0.78%, 0.78% and 0.06% respectively.
Market breadth was positive, as gainers outnumbered losers in the ratio of 38:26, while transactions in volume and value were up after investors exchanged 370.52m shares worth N8.45bn. Volume was driven by trades in Haldane McCall, Accesscorp, UBA, Wapco and Guinea Insurance.
Austin Laz and Tantalizers were the best performing stocks, gaining 10% each, closing at N2.20 and N0.99per share respectively on the back of sentiment and market forces respectively. On the flip side, NNFM and RT Briscoe lost 10% each, closing at N33.75 and N2.61per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiments to continue on profit taking, strategic buying, low valuation and position taking by smart money for year-end. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of pullbacks and 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.
Take Action
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Sub-Topics
- Impact of 2025 National Budget & Changing Government Policies On Investment Windows, by Mr Peter Sunday Adebola, Managing Director/CEO Edgefield Capital Management Ltd
- Opportunities In Fixed Income Market & Inflation Outlook In 2025, by Mr Teriba Adeboye, MD/CEO, Qualinvest Capital ltd
- Maximize 2025 The “Year Ending In 5” Effect: Uncover 10 Golden Stocks For Profitably Investing, by Mr Ambrose Omordion, CRO. Investdata Consulting Ltd
- Real Estate Investment Opportunities in 2025 Amidst Fiscal Policy Reforms Of The Government, Mr Tope Ojo, Managing Partner,Tope & Tunde Estate Surveyors & Valuers
- How To Navigate The Alternative Markets To Grow Your Portfolio in 2025, by AlhajiGarba Kurfi, MD/CEO APT Securities & Funds Ltd
- Building All-Weather Portfolio To Stay Ahead Of NGX IN 2025 & Beyond, by Mr Abiola Rasaq, Former Head, Investor Relations & Portfolio Investments United Bank For Africa Plc
- Profitably Chart Patterns & Timing To Trade “Year Ending In 5” Effect On NGX In 2025, by Mr Abdul-Rasheed Oshoma Momoh, ED Operations at, TRW Stockbrokers Ltd
- The Place Of Corporate Earnings In Trading & Investing For Retirement, by Mr Kebira Jimoh Aruna, MD/CEO GlobalView Capital Ltd
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
08028164085
