Market Update for March 5

The bearish mode of the Nigerian Exchange at the midweek slowed down slightly on a less than average traded volume, even as it extended the bear transition for a third straight session in the midst of negative market internals and selling sentiment. Profit taking continued on the NGX, even as equity markets across the globe rebounded on the news of the one-month delay in the planned implementation of tariff on automobiles, offering opportunities for negotiations, and changing market sentiment across these markets, even as countries involved are also taking countermeasures.

However, the continued decline in TB primary market auction rates as revealed during the course of Wednesday’s trading with 182-day and 364 day tenors recording a further slide to 17.75% and 17.82% respectively, while the 91-day tenor remained unchanged at 17%. This may likely be a signal that rate cut is underway, ahead of the May 19 policy meeting of the Central Bank of Nigeria, which also may be a plus for the equity market.

The extended downtrend is happening in the midst of selloffs hitting some mid to large cap stocks across some major sectors of the market, despite the declining yields in the fixed income market, as dividend payout is seemingly below market expectation, besides failing to give impetus to the market in the midst of the changing market fundamentals. This calls for new strategies to protect capital and profit from the current phase of NGX.

This wave of corrections and funds leaving the market are short-term realities of any market in the world that may be of concern for some investors while others are taking advantage of the pullbacks which are driven by market dynamics in repositioning and preparation for more audited scorecards and dividend expectation. Importantly also at this period are dividend payout and yields which remain very important to players at a time like this, when prices are looking down. Knowing that different phases of the market comes with its own opportunities and risk, especially with reactions to earnings as market players are studying corporate  numbers and rate direction of the apex bank.

At the current phase of the NGX, investors should target dividend paying companies, defensive stocks as pullbacks will impact dividend yields positively and provide room for higher upside that support capital gain. This is because the market had entered the overbought region that signals price adjustment and corrections in the midst of  selling sentiments for some sectors, consolidation moves in some industries and expectations of positive corporate numbers from some others, based on their quarterly and full year unaudited performance, coupled with their  dividend payouts history.

Technically, money flow and other momentum tools were down, revealing weakness and  selloffs that present opportunities of buying low and selling high in the midst ongoing volatility and selling sentiment. The index inching down further signal caution thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, as the index trades below the T-line and the two moving averages of 50-EMA and 50-SMA, this indicates the beginning of a markdown phase in the face of changing market fundamentals and technicals on the NGX and the economy.

The NGX index continues on a downtrend in the midst of selling sentiment, as revealed by candlestick formation and momentum indicators, as the ADX inched lower to 39.80points, while RSI and Money Flow Index were down at 49.66 and 14.19 points against the previous session’s 53.73 and 21.94 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds leaving the market on a mixed sentiment in some sectors and profit taking in others on a daily time frame. Also, trading volume pattern continued to oscillates, suggesting smart money are locking in traders into bad position amid players revaluing 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 remained mixed in the face of trade war tension.

To navigate the rest of Q1 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 lower to continue its oscillation, as it trades at $69.32 per barrel in the midst of hitting one year low and OPEC plan to increase supply. As US suspended military aid to Ukraine and EU leaders pushing for Russia-Ukraine peace talk through President Trump. Even as all eyes are on US President Policy uncertainty that continued to drive volatility.  The geopolitical tension across many economies remains a 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, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.

Midweek’s trading opened on the downside and it was sustained throughout, despite oscillating on selloffs in some major sectors, pushing the NGX’s index to an intra-day low of 106,381.20bps from its highs of 106,904.30bps, before closing below its opening level at 106,436.50bps.

Market technicals were negative and weak with lower volume when compared to the previous session in the midst of breadth favoring the bears on a selling sentiment as revealed by Investdata’s Sentiments Report showing 11% buy position and 89% sell volume. The total transaction volume index stood at 0.81points, just as energy behind the day’s performance was weak as Money Flow Index inched lower to read 14.19pts, from the previous day’s 21.94pts, indicating that funds left the market.

To successfully invest and trade in this volatile market for the rest of the year, 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 on our site and take action.

Index and Market Caps

The NGX All-Share Index at the close of midweek trading  shed 467.77 basis points, closing at 106,436.48bps from 106,904.25bps, representing a 0.44% decline, while market capitalization fell by N289.61bn, at N66.65r from the previous day’s N66.94tr, representing a 0.43% value loss.  The divergence in these indicators were due to listing of additional 1.12bn ordinary shares of Ellah Lakes Plc following its debt to equity deal at N2.80 each.

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 oversold range has increased as market correction and volatility call for intelligent trading and positive chart patterns to be on our watchlist. These stocks have potentials to retrace, considering their earnings prospects and the oscillating moves in a mixed market and recovery 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.

Meanwhile, the downturn was driven by profit taking and selloffs in the shares of, Okomu Oil, Transcorp, NB, Africa Prudential, Eterna, Dangote Sugar, Zenith Bank and International Brew, among others. This impacted negatively on Year-To-Date gain that inched lower to 3.41%, while Market capitalization gain stood at N 6.25tr, representing 6.26% increase over its opening level for the year.

Bearish Sector Indices

Sectoral performance indexes were down, save for NGX Industrial Goods index that closed flat, while the NGX Insurance index led the decliners, losing 3.88%. It was followed by the Consumer Goods, Banking and Energy with 1.51%, 0.83% and 0.07% respectively.

Market breadth was negative, as losers outnumbered gainers in the ratio of 41:12, while activities in volume and value were mixed after investors exchanged 389.57 million shares worth N11.31bn. Volume was driven by trades in Fidelity Bank, Accesscorp, UBA, Jaiz Bank and Zenith Bank.

Tantalizer and UHOMREIT were the best performing stocks after gaining 9.64% and 8.84%, closing at N2.16 and N52.95 per share respectively on the back of sentiment and impressive earnings reports. On the flip side, Caverton and Conhall Plc lost 10% and 9.87% respectively, closing at N2.53 and N3.56per share, purely on profit taking.

Market Outlook

We expect mixed sentiment as market players continue watch the new phase of NGX as investors digest latest TB rates and  corporate earnings and corporate actions in the midst of portfolio reshuffling and positioning. Even as more earnings reports 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

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

08028164085