Market Update for November 17
The seesaw movement resurfaced again on the Nigerian Exchange at the midweek as a mix-up in buying and selling activities weighed down the key performance index, halting the previous session’s positive outing on less than average traded volume and negative breadth.
The negative sentiments and mixed sessions recorded were a result of continued profit-taking in blue chips stocks that resulted to a pullback after the earnings season momentum, just as some companies like Access Bank, Fidelity Bank, NGX Group, and International Breweries broke down their minor support levels. Similarly, GTCO, PZ, Linkage Assurance, Ardova, Champion Breweries, and another break down their major support levels, becoming stocks to watch, while watching technical indicators to know when a reversal will set in.
Technically, despite the seeming negative vibes and slowdown in market recovery at this stage and phase, the NGX index’s action remains strong, because Wednesday’s pullback did not takeout Tuesday’s bullish candlestick, which is still within the rectangular channel. Momentum indicators for the day were bullish nonetheless, with ADX reading 63.20 and the money flow index looking up at 62.13 points on the daily chart. The continuation of this trend depends highly on the interplay of market forces as market players continue digesting the just-released consumer price index for the month of October, while the direction of the yield in the fixed income market remains unclear, ahead of next week’s meeting of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC).
However, the better-than-expected Q3 earnings, interim corporate actions, and positive economic data, as well the level of liquidity in the equity market will determine the extent of the expected market rally when it begins, from this pullback. Already too, all eyes are on happenings as regards the global inflation rates and oil prices currently oscillating around $82 per barrel.
Meanwhile, midweek’s trading opened slightly on the upside, before pulling back at the mid-morning session, after which it oscillated for the rest of the day on buying interests and selloffs, among the bellwether stocks. This situation pushed the composite index to an intraday low of 43,346.72 basis points from its highs of 43,495.91bps before closing below its opening point at 43,349.90bps.
Market technicals for the day were weak and mixed as volume traded was lower than the previous day’s in the midst of breadth that favoured the bears on a selling sentiment as revealed by Investdata’s Sentiment Report showing 98% sell volume and 2% buy position. The total transaction volume index stood at 0.69 points, just as the energy behind the day’s performance remains relatively strong, Money Flow Index looked down at 62.13 points, from the previous day’s 64.48 points, indicating that funds left the market.
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Index and Mkt Cap Movement
At the end of the day’s trading, the benchmark NGX All-Share Index shed 94.30 basis points, at 43,349.90bps after opening at 43,444.20bps, representing a 0.22% drop, just as market capitalization fell by N49.22bn, closing at N22.62tr, from the opening value of N22.67tr, also representing 0.22% value loss.
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Wednesday downturn was attributed to selloffs in GTCO, Flourmills, Dangote Sugar, FBN Holdings, Access Bank, and NGXGroup among others, which impacted negatively on Year-To-Date gain, reducing it to 7.65%. Market capitalization stood at N1.63tr YTD, representing a 7.39% growth from the year’s opening value.
Bearish Sector Indices
Sectoral performance indexes were down, except for the NGX Industrial Goods that closed 0.01% up, while NGX Insurance index led the decliners, losing 0.85%, followed by Consumer Goods, Banking and Energy with 0.66%, 0.37% and 0.19% respectively.
Market breadth turned negative as losers outweigh gainers in the ratio of 24:14, while activities in volume and value terms were down after players had traded 264.79m shares worth N6.68bn, compared to the previous day’s 423.83m units valued at N11.65bn. Volume was boosted by trades in FBNH, International Breweries, GTCO, Unity Bank and Access Bank.
ABC Transport and Chams were the best-performing stocks, gaining 10% and 4.53%, and closing at N0.33 and N0.23per share respectively on market forces. On the flip side, Japual Gold and Neimeth Pharm lost 9.09% each, closing at N0.40 and N1.80 per share, purely on selloffs and profit taking.
Market Outlook
We expect the mixed trend to continue ahead of next week’s MPC meeting, amid the unclear direction of yields in the fixed income market, as well as the upcoming FGN Bonds issuance. Also, momentum investing continues as high volume resurfaced after the pullbacks had created new opportunities for players to jump into positions on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the day’s trading revealed that buyers are in control, as the index rebounded. Also, we note that institutional players are not selling but positioning in blue-chip companies, as thepullbackwas on a light volume. It is equally noteworthy that this pullback at this level is for the accumulation of more positions ahead of year-end seasonality. Also, many stocks are trading within their buy ranges, a situation expected to attract more funds into the equity space, given the Dividend Yield capable of serving as a hedge against inflation.
Invest 2022 Traders & Investors Summit
Theme: Master The Market, Get The Best Of Pre-Election Year 2022
Sub-Topics
1. Balanced Trading: Playing Nigeria’s Multiple Exchanges For Diversification, MrOlatundeAmolegbe, CEO, Arthur Steven Asset Management Ltd &President of CIS
2. Agriculture, Economic Recovery & Diversification: Where Is Commodity Trading In Your Portfolio, Mr. AkinyinkaAkintunde, Business Development Manager, AFEX Commodities Exchange Ltd.
3. Technical Outlook & Indicators For Profitable Market Timing, Mr Abdul-Rasheed OshomaMomoh, Head Capital Market at, TRW Stockbrokers Ltd
4. Benefits & Dangers Of Fixed Income Instruments In An Inflationary Environment, MrTeribaAdeboye, MD/CEO, Qualinvest Capital ltd
5. Economic Outlook and implications of the N16.45 Trillion 2022 Budget On Sectors/Stock Market, Mr. OluwasegunAkinwale, Senior Portfolio Manager,Coronation Asset Management Ltd
6. Profitable Stock Picks Made Easy, Using Fundamental Tools, Mrs. Ebiere Helen Fumudoh, MD/CEO, Norrenberger Securities Ltd
7. The Role of Real Estate & REIT Instruments In the Ecosystem, Mr Tope Ojo, Managing Partner,Tope & Tunde Estate Surveyors &Valuers
8. Trade Opportunities & 10 Golden Stocks for 2022, Mr Ambrose Omordion, Chief Research Officer, Investdata Consulting Ltd
Investdata Consulting Limited holds the 10th edition of its annual Investment conference tagged Invest 2022 Traders & Investment Summit, which has over the years remained a game changer for market players. This edition is aimed at helping stakeholders identify opportunities and bringing ideas for profitable trading as we enter a pre-election year.
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We have held this annual summit since 2012, to give investor and traders insight, perspective and expectation in the new year. This year Invest 2022 Summit is exceptional being vaccination driven economic recovery after Covid 19 disruption. The big picture of what is happening and outlook for 2022, analysis of the status of different investment windows and opportunities, ranging from the economy, equity, bond, commodity, real estate and others using fundamental and technical tools.
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Looking at history, there is no doubt that correction or pullbacks are on the cards at some stage. However, this big questions on everybody minds are when will this occur and whether it will end this bull run or market recovery.
Whatever happens, what is the best way to Prepare rather than try to Predict? This is what Invest 2022 Summit will address. So you are invited to Speck or facilitate at this event
What to expect at this Summit?
A. Why the market is on high alert for the New Year rally, or Correction
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D. How to take advantage of the circular flow of funds in financial markets
E. Risk/return from Bonds to stocks right now.
F. Key to profitable trading and investing in the stock market/other investment windows
Benefits for attending
1,10 Golden Stocks for 2022
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“Invest 2022 – Connects you to new trade opportunities and ideas to boost your trading results/bottom line”
Don’t miss this summit, if you have any exposure to the stock market, either directly or indirectly via managed funds of any kind……..
Date: December 4, 2021
Time: 9am
Venue: Zoom
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Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
