Market Update for November 19
Tuesday’s trading on the Nigerian Exchange recorded another positive outing on the back of increased buying interests across the major sectors of the market that signal the gradual return of smart money to position for year-end and dividend income ahead of next week’s meeting of the Central Bank of Nigeria policy committee and peak of the earnings season for the first quarter of 2025. The bullish reversal and seasonality insights around the expected outcome of the MPC meeting in the midst of galloping inflation and contracting economic activities that will give a clear direction after next week.
Also, volume traded patterns continued to oscillate, signaling the inflow of funds to the market and individual stocks that should guide market players as per where to position with economic events and the direction of exchange rate that impacted some sectors and stocks negatively. The economic manager’s at this point should rethink their strategies or continued to trade the economy of the nation for foreign inflow with high interest rate that is driving low productivity.
The NGX All-Share index closed higher on a low traded volume and positive market internals in the midst of markup phase and recovery, as the index formed bullish hammer chart pattern in an uptrend that needs confirmation as trading opens at midweek. Cutix notified the market of the cancellation of its extraordinary general meeting, while Aradel Holdings, Accesscorp and Ucap updated the NGX of its insider dealings during the session.
Meanwhile, the NGX still presents buy opportunities for investors and smart traders who understand the importance of buying low and selling high in any market condition in the midst ongoing volatility. This is particularly true now that many stocks on the NGX are undervalued with high upside potentials, while investors carryout sector rotation on the strength of economic events and quarterly earnings reports that reveal the states of various companies on the NGX. Already, many companies posted stronger Q3 numbers that show inherent value with high possibility of higher payout at the end of the current financial year as portfolio reshuffling continue in the midst of positioning for year-end seasonality and others.
The buying sentiment in the midst of bullish hammer reversal chart pattern and retracement from resistance level of 97,975.29 basis points and 98,087.12bps, after forming a bottoming-tail and hammer candle in an uptrend. This created the perfect setup for high probability of reversal or continuation to catch end of year repositioning at the right price. Also, the index is trading above the T-line and the two moving averages of 50-EMA and 50-SMA, this indicate relatively strong momentum in the midst of changing market fundamentals and technicals on the NGX and the economy.
Technically, the NGX is in a markup phase as buyers dominate in the face of recovery and buying sentiment, as candlestick formation and momentum indicators reveal a somewhat strength in the market. ADX looked up at 24.36 points, while RSI and Money Flow Index were up to read 53.55 and 25 points against the previous session’s 50.78 and 24.27 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds returning to 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 studying the corporate earnings and policy direction of the government that look confused.
To navigate the rest of this quarter and beyond profitably, running with 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 on Tuesday inched up to continued its oscillation, trading at $73.39 per barrel in the midst of improved demand from China and Ukraine escalation. As OPEC remain indifferent on production policy in the face of ongoing geopolitical tensions and conflict in the Middle East. As demand outlook remained mixed in the midst of rate cuts by the major central banks of the world and OPEC unclear direction on output increase ahead of 2025. 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, the session started in the green and was sustained for the rest of the session, despite oscillating on position taking in blue chip companies and selloffs in highly priced stocks. This situation pushed the NGX’s index to an intra-day high of 97,975.29bps from its lows of 96,404.07bps, before closing above its opening level at 97,972.33bps.
Market technicals were positive and mixed with lower volume when compared to the previous session in the midst of breadth favouring 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 0.75 points, just as impetus behind the day’s performance was weak as Money Flow Index inched up to read 25.00pts, from the previous day’s 24.27pts, indicating that funds are entering the market at this oversold region.
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Index and Market Caps
The composite NGX All-Share Index, at the end of Tuesday trading gained 225.06 basis points, closing at 97,972.33 from 97,747.27bps, representing a 0.23% up. Market capitalization rose by N136bn, at N59.37tr from the previous day’s N59.23tr, representing a 0.23% appreciation in value.
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The session upturn was driven by position taking and accumulation in the shares of Wapco, Unilever, MTNN, Zenith Bank, Eunisell, Mansard, Japaul Gold and JohnHolt, among others. This impacted mildly on Year-To-Date gain as it inched up to 30.98%, while Market capitalization gain stood at N14.94tr, representing 45.09% growth over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were up, led by NGX Insurance index after gaining 1.90% followed by Industrial, Energy Consumer and Banking with 0.55%, 0.35%, 0.25% and 0.25% respectively.
Market breadth was positive, as gainers outnumbered losers in the ratio of 35:23, while transactions in volume and value were mixed after investors exchanged 333.95m shares worth N6.42bn. Volume was driven by trades in Accesscorp, Japaul Gold,Chams, Conhall Plc and UBA.
Wapco and Unilever were the best performing stocks, gaining 10% each, closing at N50.60 and N26.95per share respectively on the back of positive sentiment and market forces respectively. On the flip side, PZ and Berger Paints lost 9.82% and 7.71% respectively, closing at N22.50 and N17.35per share, purely on profit taking.
Market Outlook
We expect mixed sentiments to continue on bargain hunting, strategic buying, 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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- Impact of 2025 National Budget & Changing Government Policies On Investment Windows, by Mr Peter Sunday Adebola, Managing Director/CEO Edgefield Capital Management Ltd
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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
