Market Update for November 15
Trading on the Nigerian Exchange started the week on a very volatile session and negative outing as the composite index slipped marginally, thereby extending the bear transition for the fourth successive session on a less than average traded volume, but positive breadth that signals the presence of buyers. Also on Monday, and ahead of next week’s meeting of the Central Bank of Nigeria Monetary Policy Committee, the National Bureau of Statistics published Nigeria’s consumer price index for October, showing that inflation suffered a further decline to 15.99%, the seventh consecutive monthly of slow down, despite the reality in the market place, telling a different story of prices of goods and services shooting northward helplessly.
The current mixed sentiments of buying interest and selloffs in the equity space is due to players continuing to watch fixed income market yields and the upcoming federal government bonds that had made many watch development from the sidelines. This is just as discerning investors take advantage of price corrections in blue-chip stocks to position for higher returns in 2022 as the year gradually draws to a close, and amid positioning in less risky stocks with strong fundamentals and potential to grow dividend payout on the strength of their Q3 numbers.
Technically, the NGX index’s action has formed a bullish hammer as it resisted further decline on a low traded volume that supports a reversal that we need to confirm today, despite pulling back marginally on Monday. Also, momentum indicators were mixed, with ADX reading 63.76 and the money flow index turning up at 56.84 points on the daily chart, following which the possibility of rebound is high, depending on market forces.
However, the better-than-expected Q3 earnings, interim corporate actions, and positive economic data as well the level of liquidity in the equity market will determine the extent of the expected market rally when it rebounds from this pullback. Already too, all eyes are on happenings as regards the global inflation rates and oil prices currently oscillating around $82 per barrel.
Meanwhile, Monday’s trading opened on the upside, before pulling back at the mid-morning and oscillating throughout the session on position-taking and selloffs in low, medium, and high cap stocks. This situation pushed the NGX index to an intraday low of 43,176.42 basis points from its highs of 43,298.86bps before closing slightly below its opening point at 43,230.34bps.
Market technicals for the day were mixed and weak as volume traded was lower than the previous day’s in the midst of breadth that favours the bulls on a mixed sentiment as revealed by Investdata’s Sentiment Report showing 56% sell volume and 44% buy position. The total transaction volume index stood at 0.77 points, just as the impetus behind the day’s performance remains relatively strong, Money Flow Index looked up marginally at 56.84 points, from the previous day’s 56.27 points, indicating that funds entered the market marginally.
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Index and Mkt Cap Movement
At the end of Monday’s trading, the benchmark NGX All-Share index shed 22.27 basis points, closing at 43,230.34bps after opening at 43,253.01bps, representing a 0.05% drop, just as market capitalization fell by N11.83bn, closing at N22.56tr, from the opening value of N22.57tr, also representing 0.05%value loss.
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Monday’s downturn was due to selloffs and profit-taking in MTNN, Dangote Sugar, and UBA, among others, which impacted mildly on Year-To-Date gain, reducing it to 7.35%. Market capitalization stood at N1.58tr YTD, representing a 7.12% growth from the year’s opening value.
Market breadth was positive, as gainers outnumbered losers in the ratio of 20:14, while transactions in volume and value terms dropped after stockbrokers traded just 293.43m shares worth N4.29bn, compared to the previous day’s 331.70m units valued at N5.63bn. Volume was boosted by trades in FBNH, Access Bank, FCMB, GTCO, and Zenith Bank.
Cutix and Livestock Feeds were the best-performing stocks, gaining 9.89% and 9.50%, and closing at N3.00 and N2.19 per share respectively on market forces after price adjustments for bonus and dividend and the low price attraction. On the flip side, Veritascap Assurance and FTN Cocoa lost 8.70% and 6.83% respectively, closing at N0.21 and N0.41 per share, purely on profit-taking.
Market Outlook
As technicals signal a reversal after forming a bullish hammer candlestick at the end of Monday’s trading, we expect a slowdown in profit-taking that would usher in momentum investing as pullback create new opportunities for players to jump into positions on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the day’s trading revealed that sellers are in control, as the index dropped marginally. Also, we note that institutional players are not selling but positioning in blue-chip companies, as the pullback was on a light volume. It is equally noteworthy that this pullback at this level is for the accumulation of more positions ahead of year-end seasonality. Also, many stocks are trading within their buy ranges, a situation expected to attract more funds into the equity space, given the Dividend Yield capable of serving as a hedge against inflation.
Invest 2022 Traders & Investors Summit
Theme: Master The Market, Get The Best Of Pre-Election Year 2022
Sub-Topics
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
6. Profitable Stock Picks Made Easy, Using Fundamental Tools, Mrs. Ebiere Helen Fumudoh, MD/CEO, Norrenberger Securities Ltd
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
Investdata Consulting Limited holds the 10th edition of its annual Investment conference tagged Invest 2022 Traders & Investment Summit, which has over the years remained a game changer for market players. This edition is aimed at helping stakeholders identify opportunities and bringing ideas for profitable trading as we enter a pre-election year.
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We have held this annual summit since 2012, to give investor and traders insight, perspective and expectation in the new year. This year Invest 2022 Summit is exceptional being vaccination driven economic recovery after Covid 19 disruption. The big picture of what is happening and outlook for 2022, analysis of the status of different investment windows and opportunities, ranging from the economy, equity, bond, commodity, real estate and others using fundamental and technical tools.
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Looking at history, there is no doubt that correction or pullbacks are on the cards at some stage. However, this big questions on everybody minds are when will this occur and whether it will end this bull run or market recovery.
Whatever happens, what is the best way to Prepare rather than try to Predict? This is what Invest 2022 Summit will address. So you are invited to Speck or facilitate at this event
What to expect at this Summit?
A. Why the market is on high alert for the New Year rally, or Correction
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D. How to take advantage of the circular flow of funds in financial markets
E. Risk/return from Bonds to stocks right now.
F. Key to profitable trading and investing in the stock market/other investment windows
Benefits for attending
1,10 Golden Stocks for 2022
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3, Among others
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“Invest 2022 – Connects you to new trade opportunities and ideas to boost your trading results/bottom line”
Don’t miss this summit, if you have any exposure to the stock market, either directly or indirectly via managed funds of any kind……..
Date: December 4, 2021
Time: 9am
Venue: Zoom
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Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
