Mixed Sentiments Ahead On Bargain Hunting, Position Taking, More Q1 Earnings, Amidst Price Adjustments

Market Update for April 18
The sell pressure on the Nigerian Exchange slowed down on Tuesday signaling the bargain hunting activities among investors and traders as the prevailing prices of many stocks look attractive for new entry and repositioning of portfolios in the midst of corporate earnings expectations, after the market had pulled back to trade below the year’s opening level.
The seeming renewed buying interest is likely to support a rebound if the sell sentiments for highly priced stocks moderates while market liquidity improves on dividend payment as more companies holds their AGMs for shareholders to approve payment of dividends proposed. Note that shareholders of telco giant- MTNN had approved the payment of dividend, which is likely to be reinvested in the market.
The NGX All-Share index closed marginally high, halting the free fall of the market, thereby revealing the possibility of a reversal or start of consolidation on a very high traded volume and flat market breadth while strength returns to market, amid buying interest in companies with pending 2022 audited financials and Q1 2023 earnings reports. Already, more companies have notified the NGX of their board meeting to approve the Q1 financials, while NPF Microfinance presented its impressive 2022 audited financials showing growth in top and bottom lines which translated into earnings per share of 15 kobo from which 10 kobo dividend was recommended by it directors.
The market remained on the decline phase from its overbought state as the All-Share index continues trading below the 50-Day simple moving average and EMA to signal a bottom reversal pattern for technical traders and discerning investors. This however requires confirmation before investors can jump into any position, especially as stocks recently markdown have rebounded on the back of their prevailing undervalued state. Q1 numbers are likely to come predominantly mixed, due to the low economic activities during the period as a result of to cash crunch.
The prevailing dividend yields and low market price to earnings ratio provides better opportunities for discerning investors to hedge against inflation even when fixed income market yields look attractive. There is equally the uncertainty of a rate crash by the incoming government to drive the economy, just as a policy shift may be a plus for equities on a likely financial market and economic reset. Market volatility remains at the extreme on mixed sentiment as T-line stay above the index action ahead of the next market forces, due to the increasing number of companies announcing their board meeting dates to approve Q1 2023 numbers.
To navigate the rest of the quarter and year profitably using fundamental and technical analysis to run, join investdata live sessions at noon every 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 bull-run. Despite the mixed volume pattern witnessed recent days, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.
Oil price oscillation continued, further pulling back to trade at $84.34 per barrel in the midst of fear of US Fed rising rates and positive China economic growth report as Q1 GDP was up 4.5%. Just as attack on Ukraine is rising and geopolitical tension here and there across the globe, the prevailing high interest rate regime and soaring inflation, despite slowing down across the globe remain potent threat to world economy. Also, supply tightened due to the Russia-Ukraine war that entered the second year. The up and down movement of oil price also continues to drive volatility across markets.
Meanwhile, Tuesday’s trading opened slightly on the downside and oscillated throughout the session on buying and selling interest among the mid cap stocks and blue chip companies, a situation that pushed the NGXASI to intraday high of 51,144.76 basis points from its lows of 51,105.04ps, before closing marginally above its opening figure at 51,134.85bps.
Market technicals were positive and mixed with higher volume traded, when compared to the previous session in the midst of flat breadth and buying sentiment as revealed by Investdata’s Sentiments Report showing 75% buy position and 25% sell volume. The total transaction volume index stood at 2.95 points, just as impetus behind the day’s performance was weak going by Money Flow Index at 27.48pts, from the previous day’s 31.62pts, indicating that funds left the market, despite closing flattish.

To successfully invest and trade in this volatile market in 2023, 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 below.

Index and Market Caps
At the end of Tuesday trading the benchmark NGX All Share Index, inched up by 7.47 basis points, closing at 51,134.85bps from the 51,120.87bps it opened, representing a 0.02% up, just as market capitalization rose by N2.53bn, closing at N27.85tr, from the previous day’s N28.85tr, which also represented a 0.02% 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 buying range has just decreased to 18 as they build a new bullish base and positive chart patterns to be on our watchlist. These stocks have double the potentials to rally, considering their earnings prospects and the oscillating moves in a recovery market and 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 recovery 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 session upturn was driven by position taking in Transcorp, Eterna, Nahco, Africa Prudential, FBNH, Sterling Bank, NEM Insurance and International Energy among others, which impacted mildly on Year-To-Date loss that reduce to 0.22%. Market capitalization YTD loss stood at N24 billion, representing 0.22% below its opening level for the year.

Bearish Sector Indices
Sectorial performance indexes were down, save for NGX Oil/Gas closed 0.12% higher, while NGX Insurance led the decliners after losing 1.43%, followed by Banking, Consumer and Industrial goods with 0.50%, 0.06% and 0.01% respectively.
Market breadth was at par, as losers were equal to gainers in the ratio of 21:21, while transactions in volume and value were up after investors exchanged 1.92bn shares worth N5.02bn, with volume driven by trades in Transcorp, Fidelity Bank, SterlingNG, UBA and Zenith Bank.
Transcorp and RT Briscoe were the best performing stocks for the day after gaining 9.73% and 9.09% respectively, closing at N2.03 and N0.24per share respectively, on market sentiment and forces. On the flip side, Vitafoam and Linkage Assurance lost 8.65% and 8.33% respectively, closing at N16.90 and N0.44per share, purely on selloff and profit taking.

Market Outlook
We expect mixed sentiments to continue amidst bargain hunting and positioning on the attractive price levels, ahead of more Q1 earnings expectation in the midst of price adjustment for dividend and digesting of CPI figure. We note that income investors continue to target dividend paying and defensive stocks to protect their portfolios post-dividend adjustments. Any pullback at this point may add more strength to upside potentials. As such, 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
Tel: 08028164085, 08179547605