Market Update for April 15
Volatility continued on Nigeria’s equity market continued Tuesday with the composite All-Share index witnessing a marginal rebound which reversed the loss suffered at the previous session on the back of rekindled buying interests in consumer goods and financial services stocks. Sentiment remained mixed in the face of low traded volume and negative market breadth, as macroeconomic data released by the National Bureau of Statistics on Tuesday came below market expectation, despite the recent rebasing of its variables to accommodate the emergent dynamics and development in the economy.
Headline inflation reversed downward in March, rising to 24.23% from 23.18% recorded in February, an increase of 1.05%. Despite the uptick in headline inflation, however, food inflation eased slightly to 21.79%, offering mild relief to consumers, while core inflation—which excludes volatile food and energy prices climbed to 24.43%, reflecting persistent underlying price pressures in the economy. The uptick in prices of goods and services saw an uptick in the previous month to reflect high power tariffs and fuel prices.
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 contracted breadth and selling 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, Tuesday’s seeming rebound will further support investor confidence, if the trend is sustained. 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 seeming accumulation and distribution phase in some major sectors of the market, 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 up 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.
Investor sentiment as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 23.79 points, while RSI and Money Flow Index were mixed at 40.01 and 57.82 points against the previous session’s 39.55 and 63.72 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 on Tuesday pulled back marginally to continue its oscillation, as it trades at $64.46. per barrel, in the midst of increasing crude inventory and lingering impact of tariffs war, 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.
Tuesday’s trading started slightly in the green and it was sustained throughout the session, despite oscillating on buying interest in consumer goods and insurance stocks, amid selloffs in other companies. This pushed the NGX’s index to an intra-day high of 104,660.90bps from its lows of 104,509.30bps, before closing marginally above its opening level at 104,560.40bps.
Market technicals were mixed and weak with lower volume when compared to the previous session in the midst of breadth favoring the bears on a selling sentiment as revealed by Investdata’s Sentiments Report showing 33% buy position and 67% sell volume. The total transaction volume index stood at 0.73points, just as momentum behind the day’s performance was relatively strong as Money Flow Index inched lower to read 57.82pts, from the previous day’s 63.72pts, indicating that funds left the market, despite inching up.
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Index and Market Caps
At the close of trading, the NGX All-Share index inched up by 30.40 basis points, closing at 104,560.02bps from 104,529.63bps, representing a 0.03% up, while market capitalization rose by N19.10bn, at N65.70tr from the previous day’s N65.69tr, representing a 0.03% value gain.
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Meanwhile, the upturn was driven by position taking in the shares of Unilever, Custodian Investment, Accesscorp and International Breweries, among others. This impacted mildly on Year-To-Date gain which inched up to 1.59%, while Market capitalization gain stood at N5.10tr, representing 4.69% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed as NGX Consumer goods and Insurance index closed higher with 0.72% and 0.15% respectively, while the NGX Banking index decline by 0.11%, as NGX Industrial goods and Energy indexes finished flat.
Market breadth turned negative as losers outnumbered gainers in the ratio of 27:23, while transactions in volume and value mixed, after investors exchanged 361.81m shares worth N10.70bn, with volume driven by trades in Fidelity Bank, Accesscorp, Zenith Bank, UBA and FCMB.
Abbey Mortgage Bank and Unilever were the best performing stocks, gaining 9.94% and 9.65% respectively, closing at N7.41 and N38.05 per share respectively on the back of sentiment and reward announcements. On the flip side, NNFM and Caverton lost 9.97% and 9.06%, closing at N79.00 and N2.31per 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
