Market Update for February 10

Profit taking resurfaced on the Nigerian Exchange on Monday to start the week on a selling sentiment that hit banking stocks and others, thereby halting five consecutive sessions of bull transition. The index’s action resisting to breakout the all-time high of 106,087.80 basis points after testing  106,071.40bps  to pull back on profit booking. Despite the buying interest across some major sectors of the market, as the benchmark NGX All-Share index closed lower on above average traded volume and positive market internals.

Dividend expectations in the midst impressive corporate earnings continued, driving money flow into equity space as any pullback or correction at this phase of  market  distribution, will create new buying opportunities for market players. This is especially as all eyes are on audited financial statements, January consumer price index reports and policy meeting of CBN next week. Even as the market entered its peak of earnings reporting season that comes with dividend announcements.

Any pullback in the midst of ongoing volatility due to rotation on the strength of company’s performance will help the market to gather strong momentum to breakout the all-time high with focus on low valuation and growth opportunities inherent in the different stocks and industries. During the session, the newly listed Haldane McCall directors recommended 32.5% of its earnings as dividend for its shareholders, as the final audited accounts is expected to hit NGX any moment from now. Just as UACN, Conhall Plc and Redstar Express notified the market of their board meetings.

The NGX waves and uptrend are portfolio rebalancing-driven, in addition to profit taking in preparation for more audited scorecards inflow and dividend expectation in Q1. Just as dividend payout and yields remain very important to players at a time, as they relate price with expected final dividend of the companies. Knowing that one day does not change a trend and it does not change outlook especially with reactions to earnings as market players are digesting these numbers and making their decisions. Investors and traders should look the way of high yield dividend paying companies and growth stocks with higher upside potentials as a number of companies are hitting new 52-week highs. This is due to positive sentiments for some sectors, consolidation moves in some industries and expectations of positive corporate numbers from some others, based on their quarterly and full year unaudited performance, coupled with their  dividend payouts history.

Technically, money flow and other momentum tools were up, despite the market slowing down to present the opportunity of buying low and selling high in the midst ongoing volatility and mixed sentiment. As the index inched down to signal buy opportunities, thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, as the index trades above the T-line and the two moving averages of 50-EMA and 50-SMA, this indicates strength in the midst of changing market fundamentals and technicals on the NGX and the economy.

The NGX is entering the distribution phase on a selling sentiment, as candlestick formation and momentum indicators still reveal strength in the market. Just as ADX is inched up to read 30.92points, while RSI and Money Flow Index were mixed at 69.59 and 78.84 points against the previous session’s 70.08 and 78.22 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds entering the market on a selling sentiment in some sectors and position taking in others on a daily time frame. Also, trading volume pattern continued to oscillates, suggesting smart money are making effort to markup prices in the market amid players revaluing 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 trade war tension.

To navigate the rest of Q1 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 on Monday inched up to continue its oscillation, trading at $75.85 per barrel in the midst of pressure from trade war fears and US increasing crude inventory. As OPEC delay production cut to April 2025. Despite the ongoing tariffs driven trade war. Looking at the ceasefire deal in the Middle East, while Russia and Ukraine war continue. As all eyes are on the trade war.  The geopolitical uncertainties across many economies remains a 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, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.

Meanwhile, Monday’s trading opened slightly in the upside and it was sustained till midday before pulling back to oscillate on profit taking in banking stocks. This situation pushed the NGX’s index to an intra-day low of 105,885.89bps from its highs of 106,071.20bps, before closing marginally below its opening level at 105,891.30bps.

Market technicals were weak and mixed with higher volume when compared to the previous session in the midst of breadth favoring the bulls on a selling sentiment as revealed by Investdata’s Sentiments Report showing 3% buy position and 97% sell volume. The total transaction volume index stood at 0.98points, just as energy behind the day’s performance was  strong as Money Flow Index inched up to read 78.84pts, from the previous day’s 78.22pts, indicating that funds entered  the market, despite the pullback.

To successfully invest and trade in this volatile market for the rest of the year, 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 on our site and take action.

Index and Market Caps

The composite NGX All-Share Index fell by 41.70 basis points, closing at 105,891.33bps from 105,933.03bps, representing a 0.04% drop, while market capitalization rose by N477bn, at N66.07r from the previous day’s N65.59tr, representing a 0.74% value gain. Due to the listing of Zenith Bank additional primary market activity of right issue and public offer of 9.67 billion ordinary shares of 50 kobo each at N45. This boosted the market cap for the day

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 volatility call for intelligent trading 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.

Monday session downturn was driven by profit taking in the shares of FBNH, UBA, GTCO, Accesscorp, Fidelity Bnak and IEI, among others. This impacted mildly on Year-To-Date gain that inched down to 2.88%, while Market capitalization gain stood at N3.42tr, representing 4.89% increase over its opening level for the year.

Bullish Sector Indices

Sectoral performance indexes were up, save for the NGX Banking index that closed lower by 1.02%, while NGX Insurance index led the advancers after gaining 1.98%% followed by Consumer goods, Energy and Industrial goods with  0.10%, 0.09% and 0.08% respectively.

Market breadth was positive, as gainers outnumbered losers in the ratio of 44:23, while activities in volume and value were mixed after investors exchanged 567.3 million shares worth N10.4bn. Volume was driven by trades in NSLTech, Fidelity Bank, Accesscorp, UPDC and Aiico.

Beta Glass and Stanbic IBTC were the best performing stocks, gaining 10% each, closing at N95.15 and N68.20 per share respectively on the back of sentiment and market forces respectively. On the flip side, IEI and RT Briscoe lost 10% and 9.63% respectively, closing at N2.25 and N2.44per share, purely on profit taking and selloffs.

Market Outlook

We expect mixed sentiments to continue on profit taking and repositioning on strength of corporate numbers, as more earnings 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

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

08028164085