Market Update for November 13
The oscillation and relatively low traded volume on the Nigerian Exchange at midweek reveal the continued absence of smart money, otherwise known as institutional investors who are obviously still digesting the recent corporate earnings in the midst of developments in the fixed income space and macroeconomic environment. The benchmark NGX All-Share index, nonetheless closed higher, reversing the loss suffered during the previous session on the back of renewed buying interests in banking and consumer goods stocks. Volume traded for the period was low in the face of buying sentiment and positive market internals that signal accumulation and recovery.
The market rebounded on a high volatility as sector rotation and portfolio rebalancing continued on the strength of Q3 numbers and insiders’ dealings as announced by Ucap. University Press and Consolidated Hallmark Holdings, also notified the market of their board meeting and conversion of Consolidated Hallmark Insurance to a limited liability company. All eyes are on the October inflation report from Nigeria’s National Bureau of Statistics (NBS) to show by how much prices of goods and services have risen in an economy that is already contracting due to the mismatch of economic reform policies fashioned by the fiscal and monetary authorities so far.
Meanwhile, the NGX still presents buy opportunities for market players that 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 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 pressure in the face of top reversal chart pattern and retracement which needs confirmation as trading opens on Thursday. This retracement from support level of 97,215.17 basis points and 97,378.62bps, after forming a topping-tail and hammer candle in an uptrend on Tuesday. This created the perfect setup for high probability of uptrnd to catch end of year repositioning. Also, the index is trading above the T-line but below the two moving averages of 50-EMA and 50-SMA, this indicate relatively weak momentum and somewhat in the midst of changing market fundamentals and technicals on the NGX and the economy.
Technically, the NGX is on an uptrend in the midst of recovery and buying sentiment, as transaction volume slowed down to signal the absence of institutional investors in the market. Candlestick formation and momentum indicators reveal a somewhat weakness and strength in the market. The ADX is looking flat at 23.32 points, while RSI and Money Flow Index were mixed to read 46.93 and 20.25 points against the previous session’s 43.98 and 21.95 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds leaving the market on a buying sentiment in some sectors and profit taking in others. Also, trading volume pattern continued to oscillates, suggesting position taking 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 at midweek slide again to continued its oscillation, trading at $71.86 per barrel in the midst of demand concerns and fear of policy uncertainty of Trump. 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.
Midweek’s trading started in the upside and it was sustained for the rest of the session, despite oscillating on position taking in blue chip companies and selloffs in some stocks. This situation pushed the NGX’s index to an intra-day high of 97,477.80bps from its lows of 97,260.39bps, before closing above its opening level at 97,477.80bps.
Market technicals were positive and mixed with lower volume when compared to the previous session in the midst of breadth favouring the bullss on a buying sentiment as revealed by Investdata’s Sentiments Report showing 100% buy position and 0% sell volume. The total transaction volume index stood at 0.57 points, just as impetus behind the day’s performance was weak as Money Flow Index inched down to read 20.25pts, from the previous day’s 21.95pts, indicating that funds left the market, despite closing higher. This indicate oversold region to watch out.
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Index and Market Caps
At the end of trading, the composite NGX All-Share Index gained 213.46 basis points, closing at 97,477.80bps, after opening at 97,260.39bps, representing a 0.22% up. Market capitalization rose by N131bn, closing at N59.05tr from the previous day’s N58.94tr, representing a 0.22% appreciation in value.
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The upturn was driven by buying interest and accumulation in the shares of Zenith Bank, UBA, Accesscorp, Ucap, University Press, Dangote Sugar and Wapco, among others. This impacted positively on Year-To-Date gain as it inched up to 30.36%, while Market capitalization gain stood at N14.74tr, representing 44.25% growth over its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were green, save for the NGX Insurance index that closed lower by 0.58%, while the NGX Banking led the advancers after gaining 1.38%, followed by Consumer and Industrial goods with 0.38% and 0.01% respectively. While NGX Oil/Gas index finished flat.
Market breadth turned positive, as gainers outnumbered losers in the ratio of 29:19, while transactions in volume and value were down after investors exchanged 247.01m shares worth N7.51bn. Volume was driven by trades in Accesscorp, UBA, Fidelity Bank, Ucap and GTCO.
International Energy Insurance and JohnHolt were the best performing stocks, gaining 10% and 9.98%, closing at N1.32 and N6.39 per share respectively on the back of sentiment and market forces respectively. On the flip side, Regency Assurance and Daarcomm lost 10% and 7.46% respectively, closing at N0.45 and N0.62per share, purely on profit taking and selloffs.
Market Outlook
We expect mixed sentiments to continue on bargain hunting, profit taking and low valuation ahead of CPI data 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
- Opportunities In Fixed Income Market & Inflation Outlook In 2025, by Mr Teriba Adeboye, MD/CEO, Qualinvest Capital ltd
- Maximize 2025 The “Year Ending In 5” Effect: Uncover 10 Golden Stocks For Profitably Investing, by Mr Ambrose Omordion, CRO. Investdata Consulting Ltd
- Real Estate Investment Opportunities in 2025 Amidst Fiscal Policy Reforms Of The Government, Mr Tope Ojo, Managing Partner,Tope & Tunde Estate Surveyors & Valuers
- 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
- Profitably Chart Patterns & Timing To Trade “Year Ending In 5” Effect On NGX In 2025, by Mr Abdul-Rasheed Oshoma Momoh, ED Operations at, TRW Stockbrokers Ltd
- 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
