Market Update for November 23
Volatility continued on the Nigerian Exchange on Tuesday as the benchmark index short-lived previous day’s positive outing, turning slightly negative to extend its sideways movement on a low traded volume. Market breadth was, however, positive as members of the Central Bank of Nigeria’s Monetary Policy Committee concluded their final meeting for the year, voting unanimously to retain all policy instruments unchanged, in what they said is to sustain the ongoing economic recovery, despite various headwinds like the fear of COVID 19 resurfacing in some climates and the oscillating oil price at the international market.
The mixed sentiments and signals at the end of Tuesday trading indicates investors buying interest in blue-chips, especially those that had suffered losses in recent time but have a high possibility of dividend payout. Profit taking activities continued in some tickers ahead of midweek Treasury Bills’ primary market auction that will space the yield direction in the fixed income market.
Technically, NGX index action remained strong in the face of profit taking and portfolio repositioning, as the NGX All-Share index slipped to continue its sideway trending within the rectangular channel. Momentum indicators for the day were mixed nonetheless, as ADX dropped to 59.60, while Money Flow Index rose to 66.11 points on the daily chart. The continuation of this trend depends largely on the interplay of market forces and inflow funds into equity space
Tuesday’s trading started slightly in the green, before pulling back to oscillate for the rest of the session on selloffs and ‘buy’ interests in some banking stocks, a situation that pushed the NGX index to an intraday low of 43,234.57 basis points from its highs of 43,286.89bps before closing slightly below the opening points at 43,255.14bps.
Meanwhile, Tuesday market technicals were weak and mixed as volume traded was lower than the previous day’s in the midst of positive breadth and mixed sentiment as revealed by Investdata’s Sentiment Report showing 40% buy volume and 60% sell position. The total transaction volume index stood at 0.58 points, just as momentum behind the day’s performance remained relatively strong. Money Flow Index read 66.11 points, from the previous day’s 59.58 points, indicating that there was some funds inflow, despite the down market.
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Index and Mkt Cap Movement
At the close of Tuesday’s trading, the key performance NGXASI was slightly down by 4.99 basis points, at 43,255.14bps after opening at 43,260.13bps, representing a 0.01% drop, just as market capitalization fell by N590m, closing at N22.58tr, from the opening value of N22.58tr, also representing 0.01% value loss.
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This day’s downturn was driven by selloffs in stocks like GTCO, Oando, UBA, Dangote Sugar, NEM, Mansard, Livestock and Mutual Benefits Assurance among others, which impacted mildly on Year-To-Date gain, reducing it to 7.41%. Market capitalization stood at N1.56tr YTD, representing a 7.22% growth from the year’s opening value.
Bearish Sector Indices
Sectoral performance indexes were mixed, as NGX Banking closed higher by 0.21%, while NGX Insurance index led the advancers, gaining 1.97%, followed by Oil/Gas and Consumer Goods with 0.20% and 0.01% respectively. Just as NGX Industrial Goods closed flat.
Market breadth was positive as gainers outnumbered losers in the ratio of 19:15, while activities in volume and value terms were down after players had exchanged 271.97m shares worth N2.9bn, compared to the previous day’s 2.16bn units valued at N16.08bn. Volume was boosted by trades in GTCO, FBNH, Zenith Bank, Access Bank and Honeywell Flour.
Honeywell Flour and University Press were the best-performing stocks, gaining 9.95% and 8.70% respectively, closing at N4.09 and N2.50per share respectively on Monday’s merger news and market forces. On the flip side, UPDC and NEM Insurance lost 9.35% and 9.27% respectively, closing at N1.26 and N1.86 per share, purely on selloffs and profit taking.
We expect the market to maintain the oscillating posture on outcome of MPC meeting ahead of TB primary market auction, with seasonality and cycles likely to influence equity prices ahead of year-end window dressing. The low volume traded in the midst of pullbacks is creating new buy opportunities on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not selling but positioning in blue-chip companies, as the index slide on a light volume. It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the Dividend Yield capable of serving as a hedge against inflation.
Invest 2022 Traders & Investors Summit
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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
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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
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Tel: 08028164085, 08179547605