Market Update for April 9
It was a mixed session on the Nigerian Exchange at the midweek, as the composite All-Share index reversed previous day’s gain, closing lower on a low traded volume, even as it expanded the positive market breadth. These are unfolding in the midst of raging trade war threats spiked by the United States, and opportunities that have triggered retaliatory measures from different countries of the world. The renewed selling pressure or profit taking in banking 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 while Treasury Bill primary market auction rates are inching. Tenors of Nigeria’s 91=day and 182-day bills stood at 18.5% and 19.5% respectively, while the 364-day instrument remained unchanged at 19.63%, even as maturing TBs will likely provide inflow of funds into the financial markets.
Pullbacks have continued in the midst of positive market internals and selling sentiment, discerning investors and smart traders should not panic out of their stock position, especially now that reality has dawned on the U.S President who is having to apply the brakes on the ongoing global trade war he ignited, for the next 90 days. This news, as expected, impacted some major markets of world as stocks surged, just as oil prices rebounded.
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. Corporate action dates continue to guide investors’ decisions ahead of macroeconomic numbers and Q1 earnings reports.
All eyes are still on the expected Consumer Price Index for March and the Q1 scorecards that 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 benchmark NGX All-Share index is oscillating 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, Wednesday’s pullback as mentioned earlier will 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 which presents opportunities to buy low and sell high in the midst ongoing volatility and selling sentiment. The index inched lower to selloffs 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.
Investors sentiment, as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 22.78points, while RSI and Money Flow Index were mixed at 33.29 and 50.62 points against the previous session’s 34.82 and 45.83 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 at midweek rebounded to continue its oscillation, trading above $65. per barrel, after touching its lowest since February 2021 in the midst of the news of Trump pausing tariffs and production hike, 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 started in the green 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 104,128.90bps from its highs of 104,561.20bps, before closing below its opening level at 104,187.01bps.
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 13% buy position and 87% sell volume. The total transaction volume index stood at 0.71points, just as momentum behind the day’s performance was relatively strong as Money Flow Index inched higher to read 50.62pts, from the previous day’s 45.83pts, indicating that funds entered the market, despite closing lower.
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Index and Market Caps
The composite index NGXASI shed 189.74 basis points, closing at 104,187.01bps from 104,376.74bps, representing a 0.18% drop, while market capitalization fell by N119bn, at N65.47tr from the previous day’s N65.59tr, representing a 0.18% value loss.
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Meanwhile, the downturn was driven by selling pressure and profit taking in the shares of Ecobank, Unilever, Holdco, Wapco, UBA, GTCO, Transcorp, Fidelity Bank and International Breweries, among others. This impacted mildly on Year-To-Date gain which inched up to 1.22%, while Market capitalization gain stood at N5.04tr, representing 4.31% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, after the NGX Insurance and Energy closed 2.67% and Energy 0.47% higher respectively, while the NGX Banking led the decliners after losing 1.60%, followed by Consumer and Industrial goods with 0.23% and 0.04% respectively.
Market breadth turned positive as gainers outnumbered losers in the ratio of 31:23, while activities in volume and value stayed mixed, after investors exchanged 376.62m shares worth N11.89bn, with volume driven by trades in GTCO, Accesscorp, Zenith Bank, UBA and Mutual Benefits Assurance.
Livestock Feeds and VFD Group were the best performing stocks, gaining 10% each, closing at N8.03 and N72.60 per share respectively on the back of sentiment and reward announcements. On the flip side, Learn Africa lost 10%, closing at N2.97 and N5.22per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiment and rebound to continue as players digest the global outlook and 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
