Market Update for March 12
The bull run continued on the Nigerian Exchange on Tuesday, with the composite NGX All-Share index closing higher on increased buying interest in banking stocks, pushing the index’s action to breakout another psychological line of 103,000 on a high traded volume and positive market breadth. There were position taking across major sectors of the market in expectation of more corporate earnings and actions ahead of midweek’s Central Bank of Nigeria Treasury Bill primary market auction and February inflation report from the NBS on Friday.
The NGXASI’s action extended its upbeat for the seventh successive sessions to trade above the T-line, as market recovery persists in the midst of higher yields in the fixed income market and ongoing earnings reporting season which has entered its peak with all eyes on financial services providers especially to give direction in the face of rising inflation and FX challenges.
Meanwhile, the CBN’s Monetary Policy Committee meeting at which members would assess the impact of the 400 basis points rate hike draws closer, even as we await the report of the Consumer Price Index which we project may show inflation rate at 30.87%. Also, the equity market is in the last month of Q1 2024, when institutional investors and fund managers reposition their portfolios to ensure they close higher, which is why it is called end of the quarter or month window dressing.
Nigeria’s economic reality continues to reflect on the corporate and economic numbers released in recent times, especially in the 2023 audited financials released so far that have come mixed and even weak, especially among manufacturing companies revealing the impact of a rash of government and monetary policies on the economy, even as headwinds persist. This arises from foreign exchange hiccups which is putting pressure on the everyday operations of companies and subsequently, their performance following which many are reporting negative earnings, leaving zero rewards for their shareholders.
More companies on the NGX continued to notify investing public of its board meetings to approve 2023 audited financials, the latest came from Eterna, Livestock Feeds, Omatek, among others. Fidelity Bank informed the NGX of the board approval of its 2023 audited account, following which it was forwarded to CBN for final approval, while earnings forecast for Q2 were made available by Sunu Assurance and others. Also, during the session, Insider dealings updates were provided by Cutix, just as Zenith Bank notify the NGX of retirement of one of its directors.
The new uptrend and improving momentum persists with the index staying above the T-Line to gather more strength and surpassed the next resistance level as the index’s action remain on markup phase. The current state of market has created buy opportunities for position traders ahead of the release of more audited accounts. Market players should watch out for the value areas of resistance and support levels, as more earnings hit the market. The index’s action has displayed a mixed picture as all eyes are on companies’ earnings, following the optimism fueled by the belief that the impressive performance from the financial sector among others may impact the market positively.
The candlestick formation and top chart pattern revealed reversal and continuation of trend which still requires confirmation as trading opens this morning at the NGX. Therefore, investors should target companies with consistent track records of dividend payment, strong fundamentals and growth prospects that will support further growth in earnings which price feeds on in any market cycle. Technically, the index’s action is still relatively strong with top chart pattern that signaled possible reversal as profit taking is underway after straight seven day back to back rally.
The momentum indicators signal a relatively weakness market, as the ADX remain flat at 32, while RSI and Money Flow Index are looking up to read 64.69 and 59.64 points against the previous session 60.23 and 51.81 points respectively. As money flow index indicates flow of funds into equity space at the end of Tuesday trading, which traders should, also watch and trade with caution after forming a top pattern. As trading volume pattern suggests rekindled position taking in some sectors in the face of others investment windows returns remain below inflation and deprecating Naira.
To navigate the rest of the quarter and beyond profitably using fundamental and technical analysis to run, join investdata live sessions at noon every Monday, Wednesday and Friday trading day “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 range market. Despite the oscillating volume of transaction witnessed in recent time, it is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity.
Oil price on Tuesday slide marginally to continue its oscillation, as it trades at $81.92 per barrel in the midst of US hot inflation data and projection of US crude production to exceed expectation in the face of weak global demand outlook and rising geopolitical tension across the globe is also a major threat to many economies and the commodity market. Also, OPEC left production cuts unchanged and other factors that impact oil price as it continued to oscillate. This trend may likely continue in 2024, this up and down movement that drive volatility.
Meanwhile, Tuesday’s trading opened in the upside and was sustained for the rest of the session, despite oscillating on high demand for banking stocks, large cap companies shares and other, while profit taking hit some stocks. This pushed the NGX’s index to an intraday high of 103,524.38bps from its lows of 102,044.80bps, before closing above its opening figure at 103,524.44bps.
Trade metrics for the session were positive and strong, as volume was higher 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 100% buy position and 0% sell volume. The total transaction volume index stood at 1.30 points, just as momentum behind the day’s performance was relatively strong as Money Flow Index is looking up at 59.64pts, from the previous day’s 51.81pts, indicating that funds entered the market.
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Index and Market Caps
The benchmark NGX All-Share Index at the end of Tuesday gained 1,479.60 basis points, closing at 103,524,44bps after opening at 102,044.84bps, representing a 1.45% growth, just as market capitalization rose by N836.59billion, closing at N58.53tr from the previous day’s N57.70tr, which also represented a 1.45% value gain.
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 overbought range has just increased to 60 as they rallied to new highs that call for caution 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.
Tuesday’s upturn was driven by buying interests in the shares of MTNN, UBA, Accesscorp, Zenith Bank, Eterna, Oando, Cornerstone, Wapco and Wema Bank among others, which impacted positively on Year-To-Date gain which increased to 38.45%. Market capitalization YTD gain stood at N14.42 trillion, representing 42.81% above its opening level for the year.
Bullish Sector Indices
The sectoral performance indexes for the session closed higher save for NGX Consumer goods that closed lower by 0.48%, while NGX Banking led the advancers after gaining 5.36% followed by Insurance and Energy with 1.18% and 0.12% respectively. Just as NGX Industrial goods finished flat.
Market breadth was positive as gainers outnumbered losers in the ratio of 34:14, while transactions in volume and value were mixed after players exchanged 565.79m shares worth N14.23bn. Volume was driven by trades in Transcorp, Accesscorp, GTCO, Jaiz Bank and UBA.
UBA and MTNN were the best performing stocks, gaining 10% and 9.98% respectively, closing at N25.30 and N243.50per share respectively on earnings expectation and market forces. On the flip side, Tantalizer and Nascon lost 7.89% and 6.77% respectively, closing at N0.35 and N53.70per share, purely on selloffs and profit taking.
Market Outlook
We expect a continuation of the mixed sentiments on profit taking and outcome of TB auction ahead of February CPI, just as more corporate earnings with dividend are expected to hits the market and investors take advantage of low valuation to position and rebalancing portfolio. This is amid the volatility and pullbacks that add more strength to upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
Investdata Q2 Master Class
Theme: Navigating The Stock Market Profitably Amidst Contracting Economy
Sub-Topics
- Actionable Trade Roadmap And Strategies For Any Market Cycle, Mr Olatunde Amolegbe Managing Director Arthur Stevens Asset Management Ltd
2, Harnessing Market Trends With Economic Stages for Profitable Trading Strategies, Mr Abdul-Rasheed Oshoma Momoh, Executive Director, TRW Stockbrokers Ltd
3, Post-Election Year Trading Opportunities & Risk in 2024, by Mr Abiola Rasaq, CSCS Plc
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Fee: 70K
Venue: Zoom
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Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
08028164085
