Market Update for May 15
Trading activities on the Nigerian Exchange on Thursday sustained its bullish momentum and uptrend, breaking out another strong resistance level of 109,331.10 basis points on an increased buying interest across the low, medium and high cap stocks. This weighed on the benchmark NGX All-Share index as it closed higher, heading to all-time of 109,850.80bps, as Nigeria’s statistic bureau reported April consumer price index moderating to 23.71% against 24.21% in March, while more stocks made new 52-week highs. Market breadth continued to expand positively on a very high traded volume, extending its bull-run back-to-back for the third consecutive sessions.
The buying sentiment and strong momentum indicate that the NGX is set to breakout the 109,850.80bps on a positive macroeconomic data, even as all eyes are on the Q1 2025 GDP that is expected to maintain its growth trend as revealed by the recent corporate earnings of quoted companies on the NGX which represents major sectors of the economy.
The NGX’s uptrend in the midst of buying sentiment and expectation of economic reports like the Q1 2025 GDP report and this month’s Monetary Policy Committee meeting of the Central Bank of Nigeria (CBN), all together signal a systematic positioning, wait-and-see attitude among market players in the midst of sector rotation and portfolio rebalancing into growth and defensive stocks.
There is also the fading recession uncertainty at the global level had trigger positive sentiment again for Africa markets, with trade war tension gradually cooling off with the recent move by the US and China to lower tariffs and allow for a 90-day negotiation period. The U.S already a signed trade deal with the UK. The stocks with earnings momentum have been the attraction of market players, especially investors, while traders continue trading the momentum, price action and market structure while timing their trades for entry and exit amid continuing portfolio rebalancing on the exchange.
As funds continue to flow into mid and highly capitalized stocks, market players should continue to navigate and watch the trend to take advantage of the uptrend and buy into value on the strength of companies’ performance and prospect, by targeting fundamentally sound companies and defensive stocks with strong earnings power and positive technicals in the face of sector rotation persisting. The market is still at its recovery wave, even as it’s retracing up in the midst of sector rotation, consolidation moves in some industries and sectors.
Technically, money flow and other momentum tools were up to indicates funds entering the market on buying momentum that presents opportunities to buy low and sell high in the midst ongoing volatility and recovery. As the index closed higher on a positive momentum and position taking, thereby creating the perfect setup for high probability of continuation to catch Q1 numbers to reposition at the right price. Just as, the index still trades above T-line and the two moving averages of 50-EMA and 50-SMA, that revealed strength in the midst of changing market fundamentals and technicals on the NGX and the economy.
Market sentiment as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 25.31 points, while RSI and Money Flow Index were up at 71.87 and 77.32 points against the previous session’s 69.88 and 75.97 points respectively. At this state of the market, players should watch the trend and trade wisely in the midst of markup phase and 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 tariffs policy easing.
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 on Thursday inched lower to continue its oscillation, as it trades at $63.27 per barrel, in the midst of US-China trade optimism and tension in Indian fading on peace move. Even as OPEC production drop for month in the face of planning to hike output. Even as US-Russia peace talk and ceasefire in Ukraine continued as Russia and Ukraine president’s plan to meet on Thursday. The trade tariffs negotiations and white house 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.
Thursday’s trading started in the upside and was sustained for the rest of the session, despite oscillating on buying interest in consumer goods stocks and others, while profit taking in other. This situation pushed the NGX’s index to intra-day high of 109,481.90bps from its lows of 108,929.70bps, before closing above its opening level at 109,467.68bps.
Market technicals were positive and strong with higher volume when compared to previous session in the midst of breadth favoring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 97% buy position and 3% sell volume. The total transaction volume index stood at 1.15points, just as impetus behind the day’s performance was strong, as Money Flow Index inched up to read 77.32pts, from the previous day’s 75.97pts, indicating that funds entered the market.
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Index and Market Caps
At the end of Thursday, the NGXASI gained 408.31 basis points, closing at 109,467.68bps from 109,059.300bps, representing a 0.37% growth, while market capitalization rose by N256.22bn, at N68.80tr from the previous day’s N68.54tr, representing a 0.37% value gain.
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Meanwhile, Thursday upturn was driven by position taking in Nestle, Honeywell, Betaglass, Northern Nigerian Flour Mills, Oando, NB, Stanbic IBTC, Zenith Bank, Wapco, International Breweries and UBA, among others. This impacted positively on Year-To-Date gain which inched lower to 6.36%, while Market capitalization gain stood at N9.08tr, representing 9.41% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, as NGX Energy index was down by 0.18% and NGX Consumer Goods index led the advancers after gaining 1.16% followed by Banking and Industrial goods with 0.20% and 0.18% respectively. NGX Insurance finished flat.
Market breadth was positive as gainers outnumbered losers in the ratio of 36:24, while transactions in volume and value were mixed, after investors exchanged 729.87m shares worth N13.88bn, with volume driven by trades in FCMB,Fidelity Bank,Caverton, Aiico and FTNCoca.
Honeywell and Nestle were the best performing stocks, gaining 10% each, closing at N16.50 and N1,331.00 per share respectively on the back of sentiment and market forces. On the flip side, Multiverse and Wapic lost 9.64% and 4.74%, closing at N9.85 and N8.40per share, purely on profit taking.
Market Outlook
We expect mixed sentiments on profit taking, as investors digest April CPI report. Even as investors take advantage of the markup phase to buy into value in expectation of more corporate earnings reports in the midst of 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
