Mixed Sentiment, Bargain Hunting, Revaluation,Ahead Of Q3 Earnings Reports Inflow  Market Update for the Week

Market Update for the Week Ended September 22 and Outlook for 25-29

Trading activities on the Nigerian Exchange last week was mixed and bearish as selloffs in high cap stocks dragged the benchmark NGX All-Share index lower, triggering correction in the midst of consolidation range and pullback, even after the market opened for the week on impressive note and strong momentum. Also, high transaction volume resurfaced owing to insider trading and cross dealing and positioning in Universal Insurance, among others that supported the recent improved transactions on the exchange that reflected inflow of funds into the equity space. This was also helped by the yields’ outlook in the money market or fixed income environment that remained mixed in the face of rising inflation and the impact of ongoing economic reforms by the government on prices of goods and services.
In the global scene, it was the central banks week, as many monetary policy meetings were held, which outcomes were divergent as some went the way of pause by keeping interest rate unchanged, while others had a hike rate. The general disposition or stance signaled higher rates in the future that had triggered increased volatility ahead of the last policy meeting in 2023, even when macroeconomic data will be the function of their decision. Already emerging markets and others are panicking because higher interest rates in developed market will mean less outflow of funds into any other nation or market, while NGX holding structure had supported the market since 2020. This, we believe will continue until we start seeing the foreign investors. There were also the impacts of improved corporate performances that supported higher dividend payouts and mixed macroeconomic policies. These factors had combined to sustain the market for the past four years, in addition to the listing of new companies and additional shares by existing ones.
The mixed performance and bearish momentum during the period reflected profit taking in Dangote Cement, Oando and others, coupled with Fidelity Bank’s price adjustment for the 25 kobo interim dividend. Also, the market is expected to react to audited half-year result that came from Accesscorp, highlights of which was the growth in interim dividend by 50% to 30 kobo from 20 kobo in 2022.
It is noteworthy that the Q3 earnings reporting season is around the corner, even as the MPC meeting originally slated for this week has been postponed to allow the recently nominated CBN Governor and his four deputies settle down in the aftermath of the shakeup in the bank. The fact that the scorecards of banks are in the green has offered an insight into what investors would likely see across the industry at the end of the current financial year.
To navigate Q3, 2023 market volatility and the rest of the year mixed outlook 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 market correction. As volume of transaction witnessed within the week remain above the average traded volume, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.
Oil price during the week under review continued its oscillation, to record first week loss after hitting 10 months high to trade at $93.27 per barrel in the midst of Western central banks rate pause and hikes as Russia cut export of gas and diesel to Europe. Just as fear of a global recession and weak demand continued. We note also the rising geopolitical tensions across the globe and supply disruptions due to the Russia-Ukraine war that has lingered for more than a year, and is indeed escalating. The up and down movement of oil prices also continues to drive volatility across different investment windows.

Movement Of NGXASI
The NGX closed the week on a bearish note, with two trading sessions of up market, while the other three were negative, thereby extending the bear transition for two consecutive weeks. This correction was attributed to selloffs and profit taking across different classes of stocks that pushed NGXASI down, in the midst of mix sentiments and others.
The week’s trading opened on a positive note, extending the gains recorded in the previous session as the NGX All-Share index gained 0.71%, a trend it sustained on Tuesday when it inched up by 0.71%, before slowing down at midweek’s with 0.03%, this trend was sustained on Thursday and Friday as the market pulled back by 0.09% and 1.39% respectively, on profit booking and selloffs in Dangote Cement, Oando and others. This brought the week’s total loss to 0.11%, against the previous week 1.10% negative position.
In all of these, the NGX All-Share Index slipped by 71.15 basis points, closing at 67,324.59bps, from the previous week’s 67,397.74 points closing level. Within the period, the index even touched an intra-week low of 67,277.43bps, from its highs of 68,495.83bps. Similarly, market capitalisation fell by N38.9bn, which represented 0.11% value loss at N36.8tr, from the previous week’s N36.9tr,
The top gainers table for the week was dominated by low and medium cap stocks amid profit taking and mixed sentiments in interim dividend paying companies as volatility and portfolio rebalancing ahead of quarter end window dressing. Also notable is the fact that market players were accumulating positions in some stocks that had posted impressive Q2 performance ahead of Q3 numbers. So buying into value, strong earnings and high dividend yield companies continued, as the market’s recovery and mixed trend persisted, heading for 70,000 and 68,457.06bps levels again.
Trade metrics revealed a positive breadth as gainers outnumbered losers in the ratio of 48:40 on a selling sentiment as indicated by investdata sentiment report showing 4% ‘buy’ volume and 96% sell position. Money Flow Index looking flat to read 84.47bps, from the previous week’s 84.40points, an indication that funds entered the market on a weekly chart, despite sliding down on selloffs and profit taking in major stocks, in the face of high inflation rate and mixed outlook for fixed income market yields.
The NGX index’s action witnessed a pullback at the peak after testing 68,495.83bps to trade above the T-line, 20-Day moving average and 50 DMA on a high traded volume to form a top pattern reversal candlestick, that supports a downtrend, which need a confirmation in the last trading week of September, ahead of earnings reporting season.
Despite the selling sentiment and mixed momentum, the composite index traded above its 50 and 100-Day moving average, even as correction is ongoing in the market, the state of the numbers and improved liquidity on payment dates will signal reversal or continuation of trend. This depends on market forces as all eyes are on Q3 numbers that will give direction as trading opens on Monday. We note that the volume which supported this correction and pullbacks remains high, just as market expectation from the New acting CBN Governor and others are high, as the nation currency continue loss value on daily basis.

Bullish Sectoral Indices
The sectorial performance indexes were in green, except for the NGX Industrial goods that closed 4.8% lower, while the NGX Insurance led the advancers’ after gaining 3.34%, followed by Consumer Goods, Banking and Energy with 2.98%, 0.61% and 0.56% respectively.
Transactions in volume and value were mixed, as investors exchanged 3.91bn shares worth N30.38bn, compared to the previous week’s 2.93bn units valued at N47.45bn. Volume was driven by Financial Services, Oil/Gas and ICT industry, boosted by trading in Universal Insurance, Oando, UBA, Transcorp and Chams.
Sunu Assurance and Ellah Lakes were the best-performing stocks for the week, gaining 32.91% and 28.79% respectively, and closing at N1.05 and N4.25per share on sentiment and market forces. On the flip side, Tantalizer and Guinea Insurance had 21.05%and 20.69% respectively, at N0.30 and N0.23 per share, purely on profit taking and selloffs.

Outlook for the week
Being the last trading week of the quarter, we expect mixed sentiment on bargain hunting opportunities and revaluation of equities, as Investors and traders are awaiting the unveiling of agenda by key Ministries. However, retracement to the 65,559.46bps level and below is possible on profit taking as global and domestic events unfold.

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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