Market Update for May 13
The bull resurfaced on the Nigerian Exchange on Tuesday, reversing previous session’s loss and thereby halted the two-day profit booking and pullbacks, following the renewed positioning across some major sectors of the market and buying interests in blue chip companies and others. These weighed positively on the benchmark NGX All-Share index as it closed higher on a less than average traded volume and positive market internals. This rebound also signals a bottom reversal chart pattern that needs confirmation as trading opens for the midweek.
The NGX’s rebound in the midst of buying sentiment and expectation of macroeconomic reports like the Q1 2025 GDP report, April Consumer Price Index and this month’s Monetary Policy Committee meeting of the Central Bank of Nigeria, all of which together signal a systematic positioning, wait-and-see attitude among market players in the midst of better than expected corporate earnings and sector rotation. Also, the global trade war tension is gradually cooling off with the recent move by the US and China to lower tariffs and allow for a 90-day negotiation period, just as 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.
Meanwhile, Tuesday’s rebound was due to demand for mid and highly capitalized stocks, as Traders and investors continue to navigate and watch the trend to take advantage of the pullbacks to buy more on the strength of companies’ performance and value, 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 turned green to indicates funds entered the market to reflect buying momentum that presents opportunities to buy low and sell high in the midst ongoing volatility and mixed sentiment. 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 recovery and strength in the midst of changing market fundamentals and technicals on the NGX and the economy.
Investors’ psychology as revealed by candlestick formation and momentum indicators, shows that the ADX is looking up to read 23.86 points, while RSI and Money Flow Index were up at 68.36 and 76.60 points against the previous session’s 66.81 and 76.07 points respectively. At this state of the market, players should watch the trend and trade wisely in the midst of funds flowing into the market on a 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 Tuesday inched higher to continue its oscillation, as it trades at $66.79 per barrel, in the midst of US-China trade optimism and tension in Indian fading on peace move. Even as OPEC moves to hike production in the coming months. 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.
Tuesday’s trading started on the upside and it was sustained for the rest of the session, on buying interest financial services and consumer goods stocks, while profit taking in other sectors. This situation pushed the NGX’s index to intra-day high of 108,799.30bps from its lows of 108,261.50bps, before closing above its opening level at 108,763.30bps.
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 pressure as revealed by Investdata’s Sentiments Report showing 93% buy position and 7% sell volume. The total transaction volume index stood at 1.02points, just as energy behind the day’s performance was strong, even when Money Flow Index inched up to read 76.60pts, from the previous day’s 76.07pts, indicating that funds left the market.
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Index and Market Caps
At the end of Tuesday, the composite NGX All-Share Index gained 295.75 basis points, closing at 108,763.30bps from 108,467.98bps, representing a 0.27% up, while market capitalization rose by N185.75bn, at N68.36tr from the previous day’s N68.17tr, representing a 0.27% value gain.
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The upturn was driven by position taking in Oando, NB, Transcorp, Zenith Bank, Wema Bnak, Honeywell, FCMB and Chellaram, among others. This impacted positively on Year-To-Date gain which inched lower to 5.67%, while Market capitalization gain stood at N8.69tr, representing 8.82% increase over its opening level for the year.
Mixed Sector Indices
Sectoral performance indexes were mixed, as NGX Industrial Goods and Energy indexes closed lower by 0.60% and 0.16% respectively, while NGX Consumer goods index led the advancers after gaining 1,70% followed by Insurance and Banking with 0.88% and 0.20% respectively.
Market breadth was positive as gainers outnumbered losers in the ratio of 40:24, while transactions in volume and value were up, after investors exchanged 498.48m shares worth N10.80bn, with volume driven by trades in Tantalizer, Accesscorp, GTCO, NB and Zenith Bank.
Oando and Chellaram were the best performing stocks, gaining 10% each, closing at N49.50 and N11.44 per share respectively on the back of sentiment and market forces. On the flip side, HmCall and Academy Press lost 9.85% and 7.33%, closing at N4.21 and N4.30per share, purely on profit taking.
Market Outlook
We expect mixed sentiments on continued position taking and sector rotation, ahead of Q1 GDP and April CP1. As investors take advantage of the pullbacks 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
