Market Update for December 2
The first trading session of the week and the month of December started positively on the Nigerian Exchange, amid increased buying sentiment across the major sectors of the market which pushed the benchmark NGX All-Share index higher on a less than average traded volume and positive trade metrics. This extended the seesaw movement of the previous week, after forming a top chart pattern on Friday’s daily chart that supported continuation of trend, as the index is heading strongly to a resistance level of 98,000 basis points mark in the midst of buying interests in financial stocks and others. This is likely to lead to the last rally of 2024 that is underway as revealed by technical tools and indicators.
The seeming bullish momentum on the NGX is likely to continue from Monday’s rebound, as market players reposition their portfolios, react to corporate announcements and consolidation taking place in different sectors ahead of year-end seasonality and Q4 earnings reporting season in January 2025. The index is setting to breakout the strong resistance levels of 97,807.65bps and 97,885.31 bps on a relatively low traded volume. As position taking in Wapco, Accesscorp, Africa Prudential and other mid cap stocks weighed on the market.
This retracement at the current state and time of the market creates buying opportunities for discerning players as macroeconomic data and economic events signaled where investors and traders should shop ahead of Santa Claus rally in December and January effects that had turned a positive patterns and trends since 2020, looking forward to take action and position in the right stocks at the right prices. As the nation economic managers continue with their mismatch economic policies that is driving low productivity and runaway inflation of today.
During the session, Holcim Group announced the sale of its controlling stake in Lafarge Africa Plc to Chinese corporation- Huaxin Cement, while Airtel Africa informed the market of completion of its share buyback. Aradel Holdings and Berger Paints notified the market of insiders dealing in their shares.
Money flow and other momentum tools turned up to present buy opportunities for bargain hunters who understand the importance of buying low and selling high in any market condition in the midst ongoing volatility. The buying sentiment in the midst of expanding breadth are creating the perfect setup for high probability of reversal or continuation to catch end of year repositioning. Also, as the index is trading above the T-line and below the two moving averages of 50-EMA and 50-SMA, this indicate return of strength gradually in the midst of changing market fundamentals and technicals on the NGX and the economy.
Technically, the NGX is in a markup phase in the midst of recovery and volatility, as candlestick formation and momentum indicators reveal a somewhat strength and weakness in the market. ADX looking up to read 30.26 points, while RSI and Money Flow Index were up at 50.31 and 37.50 points against the previous session’s 47.24 and 30.97 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds entering the market on a buying sentiment in some sectors and profit taking in others. Also, trading volume pattern continued to oscillates, suggesting buying interest and selloffs in the market amid players revaluing the market and policy direction of the government that look confused.
To navigate the rest of this year and beyond profitably, running with economic events, fundamental and technical analysis, join investdata live sessions at noon every Monday, Wednesday and Friday trading day “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 range market. Despite the oscillating volume of transaction witnessed in recent time, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.
Oil prices Monday slide to continue its oscillation, trading at $71.82 per barrel in the midst of Israel-Hezbollah ceasefire effect and OPEC shifting its meeting on production policy in the face of ongoing geopolitical tensions in the Middle East and Russia war with Ukraine. As US President-elect tariff threats its trade’s partners and global economy outlook. The rising geopolitical uncertainties across many economies remains a threat to the global economy and energy consumption. This trend may likely continue for the rest of 2024, while the up and down movement continues to drive volatility, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.
Meanwhile, trading on Monday opened in the upside and was sustained throughout the session, despite oscillating on buying interest in blue chip companies and other stocks. This situation pushed the NGX’s index to an intra-day high of 97,761.65bps from its lows of 97,466.79bps, before closing above its opening level at 97,733.86bps.
Market technicals were positive and mixed with lower 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 91% buy position and 9% sell volume. The total transaction volume index stood at 0.91 points, just as energy behind the day’s performance was weak as Money Flow Index inched up to read 37.50pts, from the previous day’s 30.97pts, indicating that funds entered the market.
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Index and Market Caps
NGX All-Share Index, at the end of Monday trading gained 226.99 basis points, closing at 97,733.86bps from 97,506.87bps, representing a 0.23% up, while market capitalization rose by N137.61bn, at N59.25tr from the previous day’s N59.11tr, representing a 0.23% value gain.
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The upturn was driven by position taking in the shares of Wapco, UBA, Accesscorp, Africa Prudential, Eterna, Tantalizer, NB, Sunu Assurance and VFDGroup, among others. This impacted positively on Year-To-Date gain as it inched up to 30.71%, while Market capitalization gain stood at N14.89tr, representing 44.17% growth over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were in green, led by NGX Insurance index after gaining 2.14% followed by Industrial, Consumer goods, Energy and Banking with 0.89%, 0.67%, 0.37% and 0.08% respectively.
Market breadth was positive, as gainers outnumbered losers in the ratio of 36:26, while transactions in volume and value were down after investors exchanged 451.17m shares worth N10.15bn. Volume was driven by trades in Japaul Gold, UBA, Accesscorp, Wapco and GTCO.
Wapco and Africa Prudential were the best performing stocks, gaining 10% each, closing at N63.80 and N9.90 per share respectively on the back of positive sentiment and market forces respectively. On the flip side, Etranzact and NCR lost 10% and 9.92% respectively, closing at N6.75 and N4.27per share, purely on profit taking.
Market Outlook
We expect mixed sentiments to continue on rebalancing of portfolios amidst profit taking, bargain hunting, low valuation and position taking by smart money for year-end. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of pullbacks and 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.
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- How To Navigate The Alternative Markets To Grow Your Portfolio in 2025, by AlhajiGarba Kurfi, MD/CEO APT Securities & Funds Ltd
- Building All-Weather Portfolio To Stay Ahead Of NGX IN 2025 & Beyond, by Mr Abiola Rasaq, Former Head, Investor Relations & Portfolio Investments United Bank For Africa Plc
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- The Place Of Corporate Earnings In Trading & Investing For Retirement, by Mr Kebira Jimoh Aruna, MD/CEO GlobalView Capital Ltd
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
08028164085
