NGX Recorded Mixed Trend Amidst Bearish Outing, High Traded Volume Ahead Of Quarter End Window Dressing

Last week, due to the Eid-Kabir holiday, the market was limited to three trading sessions, with declines occurring in two sessions and one session remaining flat. However, the local bourse was down by 0.18% week on week, leaving the all-share index at 99,743.05 basis points. This brought year-to-date return to 33.39%. The loss of N101.75bn cumulatively in the market was sponsored by marginal sell-offs due to the Eid-Kabir celebration by the Muslim faithfuls.

Transaction volume on the NGX for the period, however, surged by a princely 94.03% to reach 3.6bn units, while total trade value saw a substantial rise of 129.21% to ₦56bn. Fidelity Bank was the biggest significant volume driver with 1.25 billion units, followed by FBNH at 1.09bn units and VERITASKAP, 135.73m units.

In terms of trade value, FBNH emerged as the top equity with transactions amounting to ₦23.84bn, ahead of FIDELITYBK and GTCO which followed with ₦13.44bn and ₦3.35bn respectively.

Market correction provides investors with the opportunity to take position for profit making, just as it is also expedient to note that liquidity triggers a bullish momentum on every exchange.

NGXASI Weekly Index Action

The market continues to recuperate despite the 600 basis points hike in interest rates by the Central Bank of Nigeria (CBN), forcing domestic investors and Foreign Portfolio Investments (FPIs) to seek alternative investment outlets. The Money Flow reading of 68.79 indicates that significant funds are still in the market and local investors are losing interest in the alternative investment windows especially with stop rates declining. Investors remain confident about the local market, which is why they are  still committed their hard-earned money to the equities space.

Currently, there is no fixed income instrument that can ever give you a positive real return except the stock market which is currently testing the 21-Day Moving Average which acting as support and resistance. We forecast that in this new week the market will break the 100,000 psychological lines as seen in previous market patterns, a situation we expect will be confirmed by various indicators and price actions. The relative strength index of 58.19 indicates a sign of strength in an uptrend direction and that a reversal is not imminent. A lot of stocks have declined massively across various sectors, creating opportunities for discerning investors to position for a bull-run.

NGX Banking Index Weekly Chart

The banking sector is one safe haven that investors can pitch their tent in this season.Rights Issues and Public Offerings, as part of the ongoing banking sector recapitalization are a big indication that a bull run is about to hit this market because a lot of funds will be pooled into this space. This sector has declined by over 23% from it all-time high, creating room for investors to make the most of this wide decline.

During the course of the just concluded week, the market saw big investors like Femi Otedola buying over N18bn worth of FBN Holdings shares, just as Chizoba Ufoeze, the Managing Director of Tengen Holdings, a company related to the chairman of the board of Access Holdings, bought over N28.8m worth of shares. Insiders in Zenith Bank also acquired over N89m worth of shares with their provident funds, while Sterling big names also invested more than N59m in its shares. When big names invest in their own shares, it is an indication that something big is about to happen because charity begins at home.

We note that the share prices of FBN Holdings, Access Holdings, UBA Group, GTCO, and Zenith Bank have declined from their all-time high by over 48%, 37%, 34%, 19% and 26% respectively!

Indication from technical analysis are looking positive as the market is about to break the 21-Day Moving Average and Money Flow is showing that a lot of investors have committed funds into these sectors, given that a lot of activities will bring about a bull-run is about to hit this space and that is why big players are pitching their tent early enough for massive profit in the near future. MACD is about to take a new turn around and it will move above the signal any moment for now.

A relative strength index of 49 indicates a bull-run while a reading above 70 means overbought. You don’t need a necromancer or astrologer to convince you that this is a sector to pitch your tent.

NGX Consumer Goods Weekly Chart

The Consumer Goods sector experienced little or no activities last week due to the limited trading days, as a lot of investors were still in the mood of the Salah festivities. This index has declined from its all time high by over 16% and is about to break the 21-Day Moving Average. Every home is a user of consumer goods, which is why it is a good sector to pitch your tent for a profitable harvest. Almost all Stocks in this index had a fantastic 2023 and Q1 2024 results, and most shares that make up this index has declined massively. With shares of Nascon and its sister- Dangote Sugar declining massively by over 40% which offers a good entry opportunity for long term investors.

Remember that the Nascon and Dangote Sugars merger is around the corner, and can happen any moment from now. It is those who invest early that will cash out early. Investors willing to partake of this rally should therefore pitch their tent early enough for maximum reward. The sector has a significant amount of funds as revealed by Money Flow reading of MACD currently below the signal line. The table can turn any moment from now with the Relative Strength Index reading of 50.

NGX Insurance Index Weekly Chart

NGX Industrial Goods Index Weekly Chart

NGX Oi/Gas Index Weekly Chart

NGX 30 Index Weekly Chart