Market Update for April 8
The bull resurfaced on the Nigerian Exchange on Tuesday even amid continued selloffs across its counterpart across the world, as fears of a global recession looms in the aftermath of the raging trade war owing to uncertainties surrounding the US trade policy that is seemingly clouding investor sentiments and revealing great value leading to changes in trading strategies. At the risk of overemphasis, the changing trade world order will make or mar some economies, based on the threats and opportunities that come with the unfolding plans of different countries or regions.
As market volatility or pullbacks continue, the right approach is to avoid panicking out of any stock at this time. Instead, take advantage of the dip to position in value and defensive stocks with strong earnings power and positive technicals, even as sector rotation persists, if you must successfully navigate this unfolding scenario. The renewed buying interests in mid to large cap stocks in some sectors after the pullbacks have created entrance opportunities in the midst of dividend announcements and payment ahead of Q1 earnings report which attracted discerning investors and smart traders to position again. This impacted the benchmark NGX All-Share index to close marginally higher on a low traded volume and negative market internals.
The market rebounded in the midst of buying sentiment ahead of March inflation report and the Q1 earnings season that is around the corner expected to reveal the state of the Nigerian economy and offer a clear direction as to where the NGX is heading. Also, all eyes are on policymakers and economic managers to handle the current wave of changes in global economic fundamentals and drive growth in Nigeria that will naturally attract inflows to the system.
Nigeria’s benchmark equity market indicator remained mixed 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, we note that the market’s rebound or pullback at this point will support higher yields for dividend income investors. It should also be noted that the ongoing volatility due to global trade warfare will definitely boost some economies across the globe and impact negatively on others. 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 seeming accumulation phase of the NGX provides opportunities for market players to target dividends, using the qualification and markdown dates to play the market, as pullbacks will impact dividend yields positively and provide room for higher upsides that support 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 strength that presents opportunities to buy low and sell high in the midst ongoing volatility and buying sentiment. The index inched up to signal positioning 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 pulse, as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 21.87points, while RSI and Money Flow Index were marginally up at 34.82 and 45.83 points against the previous session’s 32.38 and 45.69 points respectively.
Consequently, market players should watch this current trend and trade wisely in the face of funds coming back to the market on a buying 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 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 Q1 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 Tuesday, suffered further decline as it continued oscillating at $61.49 per barrel, the lowest since February 2021 in the midst of tariffs rattling the market sentiment 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.
Meanwhile, Tuesday’s trading on the NGX started slightly in the upside and was sustained for the rest of the session, despite oscillating on position taking in banking stocks and others, amid selloffs and profit taking. This pushed the NGX’s index to an intra-day high of 104,379.50bps from its lows of 104,067.70bps, before closing marginally above its opening level at 104,376.7bps.
Market technicals were negative and mixed with higher volume when compared to the previous session in the midst of breadth favoring the bears on a buying sentiment as revealed by Investdata’s Sentiments Report showing 99% buy position and 1% sell volume. The total transaction volume index stood at 0.92points, just as impetus behind the day’s performance was weak as Money Flow Index inched up to read 45.83pts, from the previous day’s 45.69pts, indicating that funds entered the market.
To successfully invest and trade in this volatile market for the rest of the year, order for Investdata’s video on Buy & Sell Technical Analysis Toolbox to navigate the volatile market profitably, enhance trading decisions and boost your bottom line. Also, to up your game in stock trading and investing, understanding the key to trading price and index action will go a long way to make the difference in your trading results, check out the video materials on our site and take action.
Index and Market Caps
At the end of Tuesday’s session, the NGXASI recovered 159.87 basis points, closing at 104,376.74bps from 104,216.87bps, representing a 0.15% up, while market capitalization rose by N100.45bn, at N65.59tr from the previous day’s N65.49tr, representing a 0.15% value gain.
Attention: If you have not signed up for INVESTDATA’s buy and sell signal setup, don’t delay, because the number of stocks entering their oversold range has increased as market correction and volatility call for intelligent trading and positive chart patterns to be on our watchlist. These stocks have potentials to retrace, considering their earnings prospects and the oscillating moves in an upmarket and weak economy.
To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy that can stimulate and re-track the economy to the path of growth and development.
Tuesday’s upturn was driven by accumulation and position taking in the shares of First Holdco, Oando, UBA, GTCO, Ecobank Transnational, NSLTech, Accesscorp, Fidelity Bank and Zenith Bank, among others. This impacted mildly on Year-To-Date gain which inched up to 1.41%, while Market capitalization gain stood at N5.23tr, representing 4.50% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, after the NGX Banking and Energy closed higher by 1.89% and Energy 0.04% respectively, while the NGX Insurance led the decliners after losing 4.07%, followed by Consumer and Industrial goods with 0.16% and 0.11% respectively.
Market breadth was negative as losers outnumbered gainers in the ratio of 41:16, while activities in volume and value stayed mixed, after investors exchanged 460.57m shares worth N10.11bn, with volume driven by trades in Accesscorp, GTCO, Fidelity Bank, FCMB and Ucap.
NSLTech and Abbey Building were the best performing stocks, gaining 8.89% and 8.35% respectively, closing at N0.49 and N5.58 per share respectively on the back of sentiment and market forces. On the flip side, UHOMREIT and Nahco lost 9.95% and 9.94%, closing at N46.15 and N62.95per share, purely on profit taking.
Market Outlook
We expect mixed sentiment and uncertainty to continue, as players digest earnings reports and dividend payouts 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
