Market Update for April 14
Trading for the week on the Nigerian Exchange started on a negative note, thereby extending the selling sentiment of the previous week in the midst of price adjustment for dividend announced and payment, as all eyes are on March consumer price index reports from National Bureau of Statistics any moment from now ahead of Q1 corporate earnings reports and few 2024 audited accounts. Even as uncertainty surrendering US trade policy and trade war possibility to trigger global recession lingers in the face of seeming pause by President Trump, which has given opportunity for negotiations.
The benchmark NGX All-Share index closed marginally lower on a low traded volume and positive market internals. As selling pressure or profit taking in financial services stocks, particularly, weighed on the market even as dividend income has gradually found its way back to the market by way of reinvestment, just as pullbacks are making dividend yields interesting in the face of expected inflation reports. Mixed sentiment had continued in the midst of expanding breadth and selling sentiment, discerning investors and smart traders should not panic out of their stock position, especially now that companies numbers are stronger to support prices.
As such, market players should take advantage of this dip to position in value and defensive stocks with strong earnings power and positive technicals, even as sector rotation persists. As the expected macroeconomic numbers and Q1 earnings reports will reveal the state of the Nigerian economy and offer a clear direction as to where the economy and NGX are heading. Also, provide insights that will guide the policymakers and economic managers to handle the current wave of changes in global economic fundamentals and drive growth in Nigeria. As the market index continue to oscillate amid global concerns over the impact of the trade tariffs policy of the Donal Trump administration in the U.S, since assuming office on January 20.
However, Monday pullback will further support higher yields for dividend income investors. It should also be noted 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 pause. 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 selloffs are creating opportunities to buy in value and reshuffle portfolios in the mature markets and in our market today.
The expanded market breadth signaled accumulation phase in some sectors of the market, as market 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.
Technically, money flow and other momentum tools are mixed, revealing the gradual return of funds to the market but still a weak market that presents opportunities to buy low and sell high in the midst ongoing volatility and selling sentiment. The index slightly lower on selling sentiment and profit 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 pules, as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 23.54 points, while RSI and Money Flow Index were mixed at 39.55 and 63.72 points against the previous session’s 39.86 and 63.56 points respectively. At this state of the market, players should watch the trend and trade wisely in the face of funds coming back to the market on a selling 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 on Monday inched up to continue its oscillation, as it trades at $64.84. per barrel, in the midst of overreaction to Trump tariffs and cautious trading, 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.
Meanwhile, Monday’s trading opened in the upside before pulling back to oscillate for the rest of the session on profit taking in banking stocks and others, amid buying interest in other companies. This pushed the NGX’s index to an intra-day low of 104,402.30bps from its highs of 104,828.10bps, before closing below its opening level at 104,529.60bps.
Market technicals were weak and mixed with higher 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 30% buy position and 70% sell volume. The total transaction volume index stood at 0.84points, just as momentum behind the day’s performance was relatively strong as Money Flow Index inched higher to read 63.72pts, from the previous day’s 63.56pts, indicating that funds entered the market, despite closing lower.
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Index and Market Caps
The key performance index NGXASI, at the end of Monday trading slide by 33.72 basis points, closing at 104,529.63bps from 104,562.34bps, representing a 0.03% drop, while market capitalization fell by N21.20bn, at N65.69tr from the previous day’s N65.71tr, representing a 0.03% value loss.
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Monday’s downturn was driven by selling pressure and profit taking in the shares of Conhall, Chams, Japaual Gold, Fidelity Bank, Jaiz Bank and International Energy Insurance, among others. This impacted mildly on Year-To-Date gain which inched up to 1.56%, while Market capitalization gain stood at N5.04tr, representing 4.35% increase over its opening level for the year.
Bearish Sector Indices
Sectoral performance indexes were down, except NGX Consumer goods index that closed higher with 0.08%, while the NGX Banking led the decliners after losing 1.99%, followed by Insurance and Energy with 0.36% and 0.19% respectively. While NGX Industrial index finished flat.
Market breadth was positive as gainers outnumbered losers in the ratio of 27:24, while activities in volume and value stayed up, after investors exchanged 428.16m shares worth N10.52bn, with volume driven by trades in Accesscorp, Zenith Bank, Fidelity Bank, UBA and GTCO.
Abbey Mortgage Bank and UPDC were the best performing stocks, gaining 9.95% and 9.82% respectively, closing at N6.74 and N3.13 per share respectively on the back of sentiment and reward announcements. On the flip side, IEI and Conhall lost 9.76% and 8.33%, closing at N1.48 and N2.75per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiment ahead CPI reports and more earnings reports in the midst of bargain hunting, profit taking and portfolio reshuffling, as few more earnings 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
