Market Update for February 11

Trading on the Nigerian Exchange on Tuesday wiped out previous session’s marginal loss, as the key performance NGX All-Share Index  rebounded, breaking out the strong resistance level of 106,087.80 basis points to a new all-time high of 106,575.00bps after touching 106,726.60bps. The strong buying interests across some mid to high cap stocks weighed on the index positively as it closed higher on a low traded volume and positive market breadth, reflecting accumulation in some stocks and sectors.

As days go by, expectation of audited full-year financial statements and dividend announcements continue to guide positioning and money flow into the market. The renewed buying interest in some stocks is supporting the rally in a markup phase that create new buying opportunities in few stocks ahead of their earnings reports, the January consumer price index figure and policy meeting of CBN next week.

This rebound in the midst of ongoing volatility is due to rotation on the strength of company’s performance will help the market to sustain a new high with focus on low valuation and growth opportunities inherent in the different stocks and industries.

During the session, Mutual Benefits Assurance made available its belated 2023 audited accounts to the market, while Nestle Nigeria notified the exchange of its board meeting.

The NGX’s waves and uptrend are portfolio rebalancing-driven in addition to profit taking in preparation for more audited scorecards inflow and dividend expectation in this Q1, just as dividend payout and yields remain very important to players at a time like this, when there is oversubscription in TB auction and rates are declining. Knowing that one day does not change a trend and it does not change outlook especially with reactions to earnings as market players are digesting these impressive numbers and making their decisions.

Investors should target dividend paying companies and growth stocks with higher upside potentials as a number of companies are hitting new 52-week highs are on the increase. This is due to positive sentiments for some sectors, consolidation moves in some industries and expectations of positive corporate numbers from some others, based on their quarterly and full year unaudited performance, coupled with their  dividend payouts history.

Technically, money flow and other momentum tools were up, to reveal strength and  present opportunity of buying low and selling high in the midst ongoing volatility and buying sentiment. As the index inched up to signal buy opportunities, thereby creating the perfect setup for high probability of continuation to catch dividend season repositioning at the right price. Also, as the index trades above the T-line and the two moving averages of 50-EMA and 50-SMA, this indicates strength in the face of changing market fundamentals and technicals on the NGX and the economy.

The NGX continued it markup phase again on a buying sentiment, as candlestick formation and momentum indicators still reveal uptrend. Just as ADX is inched up to read 32.17points, while RSI and Money Flow Index were up at 72.94 and 78.98 points against the previous session’s 69.59 and 78.84 points respectively. Consequently, market players should watch this current trend and trade wisely in the face of funds entering the market on a buying sentiment in some sectors and position taking in others on a daily time frame. Also, trading volume pattern continued to oscillates, suggesting smart money are making effort to markup prices in the market amid players revaluing 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 trade war tension.

To navigate the rest of Q1 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 up to continue its oscillation, trading at $76.83 per barrel in the midst of positive China economic data and US increasing crude inventory. Even as OPEC delay production cut to April 2025. Despite the ongoing tariffs driven trade war. Looking at the ceasefire deal in the Middle East, while Russia and Ukraine war continue. As all eyes are on the trade war.  The geopolitical uncertainties across many economies remains a 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, even as the raging war between Ukraine and Russia continues to influence global oil supply and demand.

Tuesday’s trading started in the upside and it was sustained throughout the session, despite oscillating on position taking in Dangote Cement, banking stocks and others. This situation pushed the NGX’s index to an intra-day high of 106,726.60bps from its lows of 105,873.00bps, before closing above its opening level at 106,575.00bps.

Market technicals were positive and mixed with lower volume when compared to the previous session in the midst of breadth favoring the bulls on a buying sentiment as revealed by Investdata’s Sentiments Report showing 82% buy position and 18% sell volume. The total transaction volume index stood at 0.83points, just as impetus  behind the day’s performance was  strong as Money Flow Index inched up to read 78.98pts, from the previous day’s 78.84pts, indicating that funds entered  the market.

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Index and Market Caps

At the end of Tuesday’s trading, the NGX All-Share Index gained 683.65 basis points, closing at 106,574.98bps from 105,891.33bps, representing a 0.65% growth, while market capitalization rose by N426.40bn, at N66.50r from the previous day’s N66.07tr, representing a 0.65% appreciation in value.

Attention: If you have not signed up for INVESTDATA’s buy and sell signal setup, don’t delay, because the number of stocks entering their oversold range has increased as market correction and volatility call for intelligent trading and positive chart patterns to be on our watchlist. These stocks have potentials to retrace, considering their earnings prospects and the oscillating moves in an upmarket and weak economy.

To become a member, send ‘YES’ or ‘STOCKS’ to the phone numbers below. Take advantage of this service to buy right and sell right at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy that can stimulate and re-track the economy to the path of growth and development.

Meanwhile, the upturn was driven by position taking in Dangote Cement, FBNH, UBA, GTCO, Accesscorp, Honeywell, Transcorp, SterlingNG and Eterna, among others. This impacted positively on Year-To-Date gain that increased to 3.54%, while Market capitalization gain stood at N4.85tr, representing 5.95% increase over its opening level for the year.

Mixed Sector Indices

Sectoral performance indexes were mixed as NGX Consumer goods and Energy indexes  closed lower by 0.52% and 0.02% respectively, while NGX Industrial goods index led the advancers after gaining 2.40%% followed by Banking  and Insurance with  0.44% and 0.19% respectively.

Market breadth was positive, as gainers outnumbered losers in the ratio of 39:24, while activities in volume and value were mixed after investors exchanged 478.61 million shares worth N11.76bn. Volume was driven by trades in Accesscorp, Transcorp, Veritaskap, Aiico and Zenith Bank.

Ellah Lakes and Honeywell were the best performing stocks, gaining 10% and 9.93% respectively, closing at N3.63 and N11.51 per share respectively on the back of sentiment and market forces respectively. On the flip side, IEI and Eunisell lost 9.78% and 9.74% respectively, closing at N2.03 and N12.05per share, purely on profit taking and selloffs.

Market Outlook

We expect positive sentiments to continue on repositioning on strength of corporate numbers, as more earnings 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

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

08028164085