Market Update for July 21
Trading activities on the Nigerian Exchange started the week on a positive note, extending pervious weeks’ upbeat in the face of mixed session and profit taking, as market players were looking forward to the outcome of the Central Bank of Nigeria’s Monetary Policy Committee meeting. There is the wait and see disposition that so far reflected in the low traded volume at the end of Monday’s trading session. The buying sentiment in highly priced stocks weighed on the benchmark indicators which closed higher with few stocks hitting their 52-week highs to indicate that the market is in its distribution phase, even when it continues to trend up amidst expanding negative market breadth.
There is a continuation of mixed sentiment and increasing decliners ahead of expected corporate earnings, but all eyes are on outcome of the ongoing CBN policy meeting as investors, traders and analysts interprete the report of the GDP rebasing showing that Nigeria’s economy grew by 3.13% in Q1 2025 that was released on Monday. These seemingly positive macroeconomic data may have ushered in the possibility of a rate cut by the MPC, even as inflation remains sticky. Slashing the policy rate or leaving it unchanged at this meeting will further solidify economic recovery and boost fundamentals that will attract more funds into the economy, especially if the Naira remain relatively stable.
The broader market seems weak, despite the price appreciation of Nestle Nigeria, Presco and others which lifted the benchmark NGX All-Share index to a new historic high of 131,827 basis points on negative market internals that indicates a weakening market and pullback is underway, due to the ongoing profit taking. However, the possibility of continued uptrend at this point is a function of the strength of the half-year earnings reports whenever they are released. Also, the numbers that came from Wapco after trading closed on Monday beat market expectation, as top and bottom lines grew significantly by 75% and 352% respectively to N517bn and N133bn in the first six months of 2025. This translated to earnings per share of N8.24 as against the N1.82 each reported in the same period of last year. This should give investors insight of what they should expect from others in that sector or industry.
The NGX is still at a critical level of correction or continued uptrend, depending on market forces. Already, the market is in its overbought region with strong momentum that calls for cautious trading as mentioned earlier, while companies continue to notify the exchange of the board meetings to approve their Q2 earnings reports. Pullbacks in stocks are creating opportunities for new entry and bargain hunting, as the market expects corporate numbers to beat investor expectations and Monetary Policy Rate remains unchanged at the end of ongoing policy meeting. There is also the impact of market confidence around the government’s economic reforms, while foreign investors are also seeing value in the NGX, a situation that has supported inflow of funds into the market and the economy at large.
The lingering tariff and U.S President Donald Trump’s deadline of August 1, 2025 for effective take off with trade partners continues to unsettle the global economy, even in the midst of geopolitical tensions arising from the Middle East ceasefire. This has impacted mixed sentiment in major stock markets of the world. Nonetheless, there is need to avoid panic selling, even as profit booking could arise. As such, let your trading plan and investment objective guide your entry and exit. It is noteworthy that the improvement in macroeconomic data points to where the domestic economy is heading. This is the time to pay close attention to momentum, price action and market structure while timing your trades and avoiding losing money with your stop loss. While navigating the market and targeting value on the strength of companies’ performance and prospect, focus on growth and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting.
Technically, money flow and other momentum tools were up, indicating that funds are entering the market on position taking that presents opportunities to buy low and sell high in the midst ongoing volatility and overbought state of NGX. The index inched higher on a buying sentiment, thereby creating the perfect setup for high probability of continuation to catch better-than-expected corporate earnings to reposition at the right price. Also, the index action trading above T-line and the two moving averages of 50-EMA and 50-SMA which reveals strength in the midst of changing market sentiment and technicals on the NGX. But RSI continued to signal overbought market as it reads 93.30.
Market metrics as revealed by the candlestick formation and momentum indicators shows that the ADX is very strong to read 77.55points, while RSI and Money Flow Index were up at 93.30 and 96.74 points against the previous session’s 93.17 and 88.40 points respectively. NGX at this point call for players to be watchful and trade wisely in the midst of markup, distribution and mixed 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 present in the market amid revaluation of the market and short-term opportunities, looking at economic events in the face of policy direction of the government and global economic outlook in the face of uncertainties and geopolitical tensions.
To navigate the rest of Q3 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 on Monday slide and continued its oscillation, trading at $69.24 per barrel, in the midst of trade war concerns, demand power risk, inventory worries and threats from US President for sanctions on buyers of Russian oil. Even with concerns over tariffs deadline and all. Also, the ceasefire in Mideast for peace talks that continues to hold, and Ukraine-Russia war. Even as OPEC production hike misguide the market. The ongoing developments will trigger inflation and rate hikes if peace is achieved. All eyes are on emanating quarterly earnings reports. Tariffs and geopolitical tensions are already driving mixed macroeconomic data emanating from the U.S and China which remain a concern for investors. Just as uncertainties 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.
Monday’s trading on the NGX opened in the upside and was sustained throughout the session, despite oscillating profit taking and buying interest in blue chip companies. This situation pushed the composite index to its intra-day high of 131,930bps from its lows of 131,502bps, before closing above its opening level at 131,661.81bps.
Market technicals were weak and mixed with lower volume when compared to previous session in the midst of breadth that favors the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 76% buy position and 24% sell volume. The total transaction volume index stood at 0.75points, as impetus behind the day’s performance was strong, as Money Flow Index was inched up to read 96.74pts, from the previous day’s 88.40pts, indicating that funds entered the market.
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Index and Market Caps
The NGX All-Share Index gained a marginal 76.60bps, closing at 131,661.81bps from 131,585.21bps, representing a 0.10% up, while market capitalization rose by N48.46bn to close at N83.29tr from the previous day’s N83.24tr, representing a 0.10% value gain.
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Meanwhile, the upturn was driven by accumulation and buying interest in the shares of Presco, BUA Cement, Nascon, Nestle, Julius Berger, Wapco, and Caverton among others, which impacted positively on Year-To-Date gain which inched higher to 28.05% while Market capitalization gain stood at N33.14tr, representing 33.12% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, after the NGX Industrial and Consumer goods indexes closed 1.50% and 0.06% higher respectively, while the NGX Insurance led the decliners after losing 1.35%, followed by Banking and Energy with 0.37% and 0.10% respectively. Market breadth was negative as losers outnumbered gainers in the ratio of 27:45, while activities in volume and value were down, after investors exchanged 683.22 million shares worth N20.51bn, with volume driven by trades in Accesscorp, Conhall, Chams, UBA and Zenith Bank.
Cutix and IEI were the best performing stocks, gaining 10% each, closing at N4.07 and N2.20 per share respectively on the back of sentiment and market forces. On the flip side, Meyer and McNichols lost 10% and 9.95% respectively, closing at N18.90 and N3.44per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiments on expected outcome of policy meeting, more corporate earnings, bargain hunting and sector rotation in the midst of profit booking, amid cautious trade, while investors digest earnings release so far and buying into value in the midst of 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
