Market Update for May 2

It was another positive outing on the Nigerian Exchange on Thursday after the holiday to celebrate the international workers day. The first trading session in the month of May started in green, witnessing a bullish session and position taking that extended the back-to-back gain on a very high traded volume and positive market internals, amid bargain hunting, mixed corporate earnings and dividend payments.

The mixed outlook for May arising from the popular saying among traders that “sell in May and come back in October,” may not be applicable under the current market dynamics just like it has happened over the last five years. Going by historical data that the month of May has closed positively 17 times over the past 26 years and could close green this year too. That is, not minding the economic headwinds and mixed Q1 numbers from the quoted companies. Just as the government mark their one year in office come May 29.

We expect the renewed buying interests and positive sentiment in the equity space to continue next week on the back of reactions to Q1 earnings reports and portfolio rebalancing. Market players are digesting these earnings and positioning in fundamentally sound stocks at these current low prices and inflow of funds from dividend income as payment and AGM meeting dates announced by various companies are in this month of May.

Already, the pending 2023 audited accounts from banks are being made available to the market, alongside first quarter corporate earnings majority of which are impressive and beat expectations. The full-year result that emanated from FCMB was remarkable and outstanding, with robust top and bottom-line growth that supported the proposed dividend of 50 kobo. Also, there were remarkable Q1 numbers from Nahco, Julius Berger, CAP, Presco, Wema Bank and Accesscorp, among other, irrespective of the nation’s economic headwinds that resulting from the ongoing reforms and policy implementations of economic managers.

That notwithstanding the correction and ranging market, the rebound continues to create new entry opportunities for market players, given the oversold state of the market and positive technical position as revealed by the bottom chart pattern and uptrend at the end of Thursday’s session which signal markup. Already, traders and investors are looking at Q1 numbers as a game changer and unfolding happenings in the economy to further guide their investment decisions.

The full year 2023 earnings from Insurance companies and first quarter reports of others are expected to hit the market any moment from now. The numbers released so far are mixed as some company’s performance beat expectations, while others came disappointing. The companies that posted impressive numbers as mentioned earlier include: Total Energies, UACN, Okomu Oil, IMG, May/Baker and others.  The earnings reports from Seplat, Wapco, Etranzact, Meyer, Beta Glass, BUA Cement and others were, however, mixed, looking at their top and bottom lines.

The NGX index’s action continued its rebounds as it is set to breakout the T-line ahead of 50-Day Moving Average, confirming return of strength and improving momentum while extending its markup phase, as the index witnessed another gain on a high traded volume and positive market breadth close to 8-day moving average exponential and 50 DMA to confirm continuation or reversal of trend depending on market forces and liquidity level. Market players are also looking at corporate actions to position for dividend income. Although, we see fiscal and monetary policies trying to return the nation’s economy to the path of recovery, even with the continued mismatch of policies and implementation style. As oscillating oil production output.

More companies on the exchange continued to notify the investing public of their AGM meetings. The latest came from Wema Bank, Nahco, Okomu Oil, Transcorp, FCMB and others, while Airtel Africa updates the market of its share buyback. Just as Cutix and The Initiates informed the market of its insiders dealing. Therefore, investors should target companies with consistent track records of dividend payment, strong fundamentals and growth prospects that will support further growth in earnings which price feeds on in any market cycle.

Technically, there is a reversal signal on the NGX that support an uptrend that needs to be confirmed as trading opens on Friday. The market still remains somewhat on a buying sentiment as revealed by candlesticks formation and momentum indicators. As ADX is looking up at 40.92, while RSI and Money Flow Index are up to read 36.18 and 37.96 points against the previous session 30.70 and 27.30 points respectively.  Market players should watch this current trend and trade wisely after the index had signaled reversal in the face of funds entering the market in a markup phase. Also, trading volume pattern remained mixed, to suggests wait and see in some sectors and buying interest in the face of bull returning to the market.

To navigate the rest of the quarter and beyond profitably using fundamental and technical analysis to run, 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 price was flat on Thursday. as it continues its oscillation to trade at $83.67 per barrel in the midst of heading for weekly loss in 3 months and easing tension in middle east. As supply risk slowdown in the face weak global demand, as investors looks to the state of global economies in the face of cooling tension in Middle East and mixed macroeconomic data from matured economies.   Geopolitical tension across the globe remained a major threat to many economies and the commodity market and other factors that impact oil price as it continued to rally. This trend may likely continue in 2024, this up and down movement that drive volatility. As middle East conflict and war in Ukraine last.

Meanwhile, Thursday’s trading opened slightly in the upside and was sustained throughout on position taking in some stocks, especially banking counters and others. This situation pushed the NGX’s index to an intraday high of 98,763.02bps from its lows of 98,224.52bps, before closing above its opening figure at 98,762.78bps.

Market technicals for the session were positive and strong, as volume was higher when compared to the 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 1.52 points, just as momentum behind the day’s performance was  relatively weak as Money Flow Index inched up to read  37.96pts, from the previous day’s 27.30pts, indicating that funds entered the market.

For you to successfully invest and trade in this volatile market in 2024, 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 above and prepare for Q3 Master Class.

Index and Market Caps

The benchmark NGX All-Share Index, at the end Thursday’s trading gained 537.15bps to 98,762.78bps after opening at 98,225.63bps, representing a 0.55% growth, just as market capitalization rose by N303.76bn, closing at N55.86tr from the previous day’s N55.55tr, which also represented a 0.55% appreciation in value.

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 pullbacks call for caution 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.

The upturn was driven by buying interests and accumulation in the shares of Presco, Dangote Sugar, Conoil, Flourmill, GTCO, Zenith Bank, FBNH, Accesscorp and UBA among others. This impacted positively on Year-To-Date gain which increased to 32.08%. Market capitalization YTD gain stood at N11.54tr, representing 37.12% above its opening level for the year.

Bullish Sector Indices

The sectoral performance indexes were in green, led by NGX Banking after gaining 3.20%, followed by Energy, Insurance, Consumer and Industrial goods with 0.95%,0.67%, 0.58% and 0.01% respectively.

Market breadth was positive as gainers outnumbered losers in the ratio of 29:14, while transactions in volume and value were mixed after investors exchanged 665.20m shares worth N5.54bn. Volume was driven by trades in Abbey Building, Accesscorp, Veritas Kapital, NB and Transcorp.

Presco and Flourmill were the best performing stocks, gaining 10% each, closing at N229.90 and N33.55 per share respectively on market forces and impressive payout. On the flip side, Nascon and University Press lost  9.99% and 9.29% respectively, closing at N47.30 and N2.05per share, purely on selloffs and profit ntaking.

Market Outlook

We expect mixed sentiments to continue in the face of dividend investing and reaction to Q1 numbers as Insurance corporate earnings are expected with dividend announcements, while taking advantage of pullbacks to position and rebalancing portfolio.

This is amid the volatility and pullbacks that add more strength to upside potential. 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

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

08028164085