Market Update for April 23
Trading activities on the Nigerian Exchange at the midweek, extended its bullish momentum on increased buying sentiment that support a markup phase in the face of positive Q1 numbers from financial services and consumer goods sectors, especially as United Bank for Africa and Guinea Insurance made available impressive Q1 earnings reports that give market players an insight into what they should expect going forward. All eyes are on more Q1 corporate scorecards, even as expectation of dividend income for reinvestment, will further boost the inflow of funds into the equity space.
UBA reported 37.3% and 33.1% growth respectively in top and bottom lines which stood at N712bn and N189.8bn to kick-start the current financial year on a positive note that translated to earnings per share of N5.35, against N3.96 recorded in the same period of 2024. These numbers triggered buying interests in banking stocks as high interest rate continues to impact positively on net interest margin of banks. The Q1 reports from the Insurance company was also impressive, with N706.64m against N484.87m revenue in 2024, while PAT moved up to N130.31m from N93.37m in 2024 which produced EPS of 16 kobo against 12 kobo in the previous year. This also, is a pointer to what the market should expect from its industry.
Investors and analysts are still observing keenly the unfolding events globally as regard the impact of the U.S trade policy on the world economy, even as negotiations are ongoing to find a lasting solution to a problem that has already triggered a shift in global trade order. This problem is, however, a plus for some emerging economies like Africa, among others provided the right steps are taken. The extension of the NGX’s recovery is a bullish sign for the market ahead of more Q1 earnings reports, as investors and traders continue to navigate and watch the trend to take advantage of the seeming uptrend on the strength of listed companies’ performance. Investors continue to target fundamentally sound stocks as they position in value and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting.
However, the changing global economic fundamentals and shift in trade pattern will definitely boost some economies across the globe and impact negatively on others even when trump backs down. It is therefore time for our economic managers and governments to rethink their fiscal and monetary policies if they are to drive and sustain growth in the nation economy, even as the recent oscillation and recovery are creating opportunities to buy in value and reshuffle your portfolios in today market.
The markup phase of the market and some major sectors revealed opportunities, as players target dividend income and capital gain. This is because the market is still at its oversold region, even as it’s retracing up in the midst of sector rotation, consolidation moves in some industries and expectations of more positive quarterly numbers any moment from now. These numbers will give a clear direction, if the earnings reports beat expectations.
Technically, money flow and other momentum tools are up, revealing that funds entering the market and strength that presents opportunities to buy low and sell high in the midst ongoing volatility and buying sentiment. As the index closed higher on buying sentiment and position taking, thereby creating the perfect setup for high probability of continuation to catch dividend season and Q1 numbers to reposition at the right price. Just as, the index trades above T-line but still below the 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 slowdown to read 25.16 points, while RSI and Money Flow Index were up at 51.83 and 53.40 points against the previous session’s 45.75 and 51.77 points respectively. At this state of the market, players should watch the trend and trade wisely in the midst of funds flowing into 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 gradually taking position amid revaluation of 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 Trump backtracking and market relief.
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 pulled back to continue its oscillation, as it trades at $66.76 per barrel, in the face of mixed market signal, US inventory draw and OPEC planning another output hike, even as US-Russia peace talk and ceasefire in Ukraine remains on shaky grounds. The trade tariffs negotiations and white house rumor talks flying 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.
The session opened in the upside and was sustained for the rest of the session, despite oscillating on demand for consumer goods and financial stocks, amid profit taking in other companies. This pushed the NGX’s index to cross the 105,000 psychological line and touch intra-day high of 105,305.30bps from its lows of 104,736.80bps, before closing sharply above its opening level at 105,283.67bps.
Market technicals were strong and positive with higher volume when compared to previous session in the midst of breadth favoring the bulls on a buying pressure as revealed by Investdata’s Sentiments Report showing 100% buy position and 0% sell volume. The total transaction volume index stood at 1.44points, just as momentum behind the day’s performance was relatively strong as Money Flow Index inched higher to read 53.40pts, from the previous day’s 51,77pts, indicating that funds entered the market.
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Index and Market Caps
The benchmark NGX All-Share Index gained 538.69 basis points, closing at 105,283.67bps from 104,745.00bps, representing a 0.52% growth, while market capitalization rose by N338.49bn, at N66.16tr from the previous day’s N65.80tr, representing a 0.52% appreciation in value.
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Meanwhile, the upturn was driven by position taking in the shares of GTCO, Dangote Sugar, International Breweries, Accesscorp, UBA, Zenith Bank and ABC Transport, among others. This impacted positively on Year-To-Date gain which inched up to 2.30%, while Market capitalization gain stood at N5.49tr, representing 5.28% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, as the NGX Banking and Consumer goods indexes closed higher with 2.98% and 1.25% respectively, while the NGX Insurance index led the decliners after losing by 0.81% followed by Energy and Industrial goods with 0.09% and 0.02% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 34:16, while activities in volume and value were up, after investors exchanged 744.86m shares worth N18.28bn, with volume driven by trades in Fidelity Bank, GTCO, Universal Insurance , Accesscorp and Tantalizer.
ABC Transport and VFD Group were the best performing stocks, gaining 9.86% and 9.62% respectively, closing at N1.56 and N17.10 per share respectively on the back of sentiment and markdown. On the flip side, Tripple Gee and MRS Oil lost 10% and 9.95%, closing at N1.98 and N1 per share, purely on profit taking.
Market Outlook
We expect mixed sentiments to continue on bargain hunting and expectation of more Q1 earnings reports in the midst of 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
