Market Update for March 20
Profit taking persisted on the Nigerian Exchange at the midweek as bearish sentiments continued on a low traded volume and positive market breadth in the face of selloffs in banking stocks and others that pushed the composite NGX All-Share index lower.
It was a mixed sectoral performance as buying interests and profit booking were witnessed in some major sectors of the market in the midst of continued absence of corporate earnings in the market to support the changing fundamentals and give direction. At the end of midweek’s trading more insurance companies continued to notify the exchange of the delay in filing of their 2023 financials, due to the introduction of IFRS 17 accounting standards by the regulator requiring changes in the disclosures methods and will take time to do adjustment. On the other hand, the apex bank has delay the approval of banks results, which is already affecting investor’s sentiments and confidence in the market. Even as all eyes are still on the audited accounts of banks, ahead of next week policy meeting.
Market players continue portfolio repositioning even as the market extends its distribution phase with three black crows reversal chart pattern in a correcting market. Although, we see government and its economic team trying to return the nation’s economy to the path of recovery, even with the continued mismatch of policies and implementation that reflects a disconnection between the fiscal and monetary perspectives.
The latest macroeconomic data has showed inflation at its all-time high, interest rate at the highest and national output slowing down, an indication of late contraction of an economy. The CBN, through its monetary policy, usually moves to stabilize prices, improve economic activities and manage government flows, but the opposite is the case today. It does seem that the MPC has sacrificed the economy on the altar of attracting foreign inflows for improved foreign exchange supply that will help address FX challenges, as CBN has clear all the FX backlog according to them and also the nation external reserve looking up after many months in decline. Let hope this will support productivity and attract foreign investors.
Quoted companies on the NGX have continued announce their board meetings to approve their 2023 audited financials. The latest are UACN and Nestle among others. Airtel Africa continued its share buyback activities updates, while NEM, Guinea Insurance and Veritas Kapital Assurance informed the market of their delay in filing 2023 audited report and Q1 2024 results, just as Accesscorp notified the market of proposed acquisition national bank of Kenya limited, while FBN Holdings appoints non-executive directors. 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 NGX index’s action is still relatively strong with 3 black crows chart pattern that signaled continuation of profit taking after bearish hammer candlesticks formation revealed reversal of trend, as momentum indicators were mixed to signal relatively strength in the market, as the ADX inched up at 35.74, while RSI and Money Flow Index are mixed to read 64.05 and 73.04 points against the previous session 65.76 and 69.99 points respectively. As money flow index looks up to indicate funds flowing into equity space and RSI looking down to revealed weakness in trend and market, traders should watch out and trade with caution after the index had formed a top pattern and momentum is relatively weaken. Also, trading volume pattern remained mixed, to suggests rekindled position taking in some sectors and profit taking in the face of others investment windows returns remain below inflation as Naira continues to deprecate.
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 at midweek slide to continue its oscillation, as it trades at $85.95 per barrel in the midst of Fed rate decision and stronger dollar, as tightening supply as a result of rising geopolitical tension across the globe remained 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. As middle East conflict and war in Ukraine last.
Midweek’s trading started in the red and oscillated for the rest of the session, on profit taking hitting some stocks, while buying interest continue in some stocks. This situation pushed the NGX’s index to an intraday low of 104,212.90bps from its highs of 104,553.30bps, before closing below its opening figure at 104,256.8bps.
Trade metrics for the session were weak and mixed, as volume was lower compared to the previous session in the midst of breadth favoring the bulls on a selling sentiment as revealed by Investdata’s Sentiments Report showing 13% buy position and 87% sell volume. The total transaction volume index stood at 0.86 points, just as impetus behind the day’s performance was relatively strong as Money Flow Index is looking up at 73.04pts, from the previous day’s 69.99pts, indicating that funds entered the market, despite closing in red.
For you to successfully invest and trade in this volatile market in 2024, order for Investdata’s video on Buy & Sell Technical Analysis Toolbox to navigate the volatile market profitably, enhance trading decisions and boost your bottom line. Also, to up your game in stock trading and investing, understanding the key to trading price and index action will go a long way to make the difference in your trading results, check out the video materials above and join the upcoming Q2 Master Class details below.
Index and Market Caps
The NGX All-Share Index at the end of the trading shed 296.50bps, closing at 104,256.81bps after opening at 104,553.31bps, representing a 0.28% decline, just as market capitalization fell by N167.65bn, closing at N58.95tr from the previous day’s N59.12tr, which also represented a 0.28% depreciation 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 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.
The downturn was driven by selloffs and profit taking in FBNH, Transcorp, Vitafoam, Zenith Bank, Berger Paints, ETI and TIP among others, which impacted negatively on Year-To-Date gain which reduced to 39.43%. Market capitalization YTD gain stood at N14.35 trillion, representing 43.20% above its opening level for the year.
Mixed Sector Indices
The sectoral performance indexes were mixed, as NGX Banking closed lower with 1.79%, while NGX Insurance led the advancers after gaining 2.09%, followed by Energy and Consumer goods with 0.24% and 0.14% respectively. Just as NGX Industrial goods finished flat.
Market breadth was positive as gainers outnumbered loser in the ratio of 29:23, while activities in volume and value were down after stockbrokers had traded 298.65m shares worth N6.84bn. Volume was driven by trades in FBNH, UBA, Transcorp, Fidelity Bank and Accesscorp.
NEM and CWG were the best performing stocks, gaining 10% each closing at N8.80 and N6.05per share respectively on earnings expectation and market forces. On the flip side, NSL Tech and FBNH lost 10% and 9.90% respectively, closing at N0.54 and N39.60per share, purely on selloffs and profit taking.
Market Outlook
We expect a mixed sentiment and profit taking to continue as players await the release of more corporate earnings with dividend possibility ahead of next MPC meeting, while 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
- Understanding Business Model & Power of Earnings In Equity Price Movement, Mr Ambrose Omordion, CRO. Investdata Consulting Ltd
Date: March 30, 2024
Fee: 70K
Venue: Zoom
Learn from the industry’s top trading and investment experts featuring at the Q2 master class as actionable roadmap and trading strategies to navigate the prevailing uncertainties in the nation’s economy will be share. How successful market players find more time and financial freedom trading stocks. How to make money in all market direction. The true secret to trading risk reward ratio, Techniques to generate cash flow from your stock holdings and trading. Analysis of different investment windows in the face of higher yields and interest rates. Ways to enhance your purchasing power in this runaway inflation environment.
If you want to be among successful investors and traders in Q2, send Yes to: 08028164085, 08179547605 now.
Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
08028164085
