Market Update for April 16
Market dynamics on the Nigerian Exchange continued at the midweek in the midst of price adjustments for dividends so far announced by company directors, and expectation of Q1 corporate earnings reports, as market players digest the latest macroeconomic reports and the unfolding events globally and impact of the U.S trade policy on the world economy. We note the ongoing negotiations to find solutions with hopes that the ensuing tension will ease among nations and trigger positive sentiment any moment from now, while staving off a recession.
The benchmark NGX All-Share index closed sharply lower, breaking down the 104,000 basis points psychological line on a low traded volume and positive market internals in the face mixed sentiment to short-lived the previous session marginal gain. Buyers were in control of trading, just as there were markdown of first-tier banks, as well as selloffs in other stocks weighed on the market. Also, all eyes are still on Q1 corporate earnings reports and the few 2024 audited accounts still outstanding, amid the uncertainty surrendering the U.S trade war and the lingering possibility of that it could trigger a global recession in the face of a seeming pause by President Donald Trump, which has given opportunity for negotiations.
Mixed sentiment continued in the midst of expanded breadth and mixed sentiment, as market players continue to navigate and watch the trend to take advantage of the oscillating market on the strength of listed companies’ performance. Even as discerning investors and smart traders are targeting fundamentally sound stocks and not panicking out of their stock position. As such, recent dips have created opportunities to position in value and defensive stocks with strong earnings power and positive technicals, even as sector rotation persists.
However midweek’s pullback created another opportunity of buying in value, knowing that the ongoing volatility due to the global trade warfare will definitely boost some economies across the globe and impact negatively on others even if it was paused. It is therefore time for economic managers and governments to rethink their fiscal and monetary policies if they are to drive and sustain growth in their domains, even as the recent weak market are creating opportunities to buy in value and reshuffle portfolios in the mature markets and in our market today.
The decline phase in the market and some major sectors revealed opportunities, as players target dividends and capital gain. This is because the market is still at its oversold region that supports retracement in the midst of sector rotation, consolidation moves in some industries and expectations of positive quarterly numbers any moment from now. These numbers will give a clear direction, if the earnings reports beat expectation.
Technically, money flow and other momentum tools are mixed, revealing that funds left the market, even as weak market presents opportunities to buy low and sell high in the midst ongoing volatility and mixed sentiment. The index inched lower on mixed sentiment and position taking, thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, the index still trading below the T-line and two moving averages of 50-EMA and 50-SMA, even when it signaled recovery in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market metrics as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 25.26 points, while RSI and Money Flow Index were down at 33.67 and 52.59 points against the previous session’s 40.01 and 57.82 points respectively. At this state of the market, players should watch the trend and trade wisely in the face of funds leaving the market on a mixed sentiment in some sectors and position taking in others on a daily time frame. Also, trading volume pattern continues to oscillate, suggesting smart money are watching 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 in the face of trade war uncertainty and geopolitical tension.
To navigate the rest of Q2 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 rebounded to continue its oscillation, as it trades at $66.02. per barrel, in the midst of hopes that tension will ease in the US -China trade conflict and US crude inventory data, even as US-Russia peace talk and ceasefire in Ukraine remains on shaky grounds. The trade war uncertainty has continued to drive sentiment and global economic activities, just as geopolitical tensions 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.
Midweek’s trading opened in the downside and it was sustained for the rest of the session, despite oscillating on position taking in consumer goods and insurance stocks, amid selloffs in other companies. This pushed the NGX’s index to an intra-day low of 103,597.10bps from its highs of 104,589.70bps, before closing sharply below its opening level at 103,851.88bps.
Market technicals were mixed and weak with lower volume when compared to the previous session in the midst of breadth favoring the bulls on a selling sentiment as revealed by Investdata’s Sentiments Report showing 26% buy position and 74% sell volume. The total transaction volume index stood at 0.70points, just as momentum behind the day’s performance was relatively strong as Money Flow Index drop to read 52.59pts, from the previous day’s 57.82pts, indicating that funds left the market.
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Index and Market Caps
NGX All-Share index at end of the day trading shed 708.14 basis points, closing at 103,851.88bps from 104,586.44bps, representing a 0.68% decline, while market capitalization fell by N445bn, at N65.26tr from the previous day’s N65.70tr, representing a 0.68% depreciation in value.
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Meanwhile, the downturn was driven by position taking in the shares of GTCO, Zenith Bank, Custodian Investment, IMG, Chams and UPDC, among others. This impacted negatively on Year-To-Date gain which inched lower to 0.90%, while Market capitalization gain stood at N4.64tr, representing 3.99% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed as NGX Insurance and Consumer goods index closed higher with 0.80% and 0.34% respectively, while the NGX Banking index led the decliners after losing by 4.67% followed by Energy with 0.05%. As NGX Industrial goods finished flat.
Market breadth turned positive as gainers outnumbered losers in the ratio of 25:20, while transactions in volume and value mixed, after investors exchanged 351.66m shares worth N13.71bn, with volume driven by trades in Accesscorp, GTCO, FCMB, UBA and Chams.
Abbey Mortgage Bank and sovereign Trust Insurance were the best performing stocks, gaining 9.99% and 7.69% respectively, closing at N8.15 and N0.98 per share respectively on the back of sentiment and reward announcements. On the flip side, IMG and Guinea Insurance lost 10% and 9.52%, closing at N34.20 and N0.57per share, purely on profit taking.
Market Outlook
We expect mixed sentiment to continue as players digest the latest inflation reports in expectation of more Q1 earnings reports in the midst of bargain hunting, profit taking and 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
