Market Update for June 6
Tuesday’s trading on the Nigerian Exchange reversed the negative outing witnessed in the previous session, as the benchmark NGX All-Share index closed higher to breakout a major resistance level of 55,985.47 and psychological line of 56,000 basis points. Traded volume was low, just as market breadth was positive in the absence of any fundamental news and other factor that can influence the market. As such, the market is currently running purely on technicals that relating to volume, prices and momentum as players look forward to macroeconomic reports, as well as the Q2 earnings reporting season in July, and new government economic policies and their implementation guidelines.
The NGX index’s action has finally broken out at the end of Tuesday’s trading, on a daily chart with low transaction volume and a slowdown in money flow index. On this note, market players should wait to confirm the new uptrend and breakout before jumping fully into the market currently trading at its 16-year high, in the midst of a dicey outlook for the month of June. Historically, the month has been known for profit taking and selloffs for portfolio repositioning ahead of the half-year earnings season when positioning takes place for Q3 in the second half of the year. Meanwhile, more companies continue to notify the exchange and investing public of their AGM resolutions and closed period for half year financials, just as the share price of UACN will be adjusted at the midweek for a dividend of 25 kobo proposed by the board. Also, the market earnestly awaits the audited financials of March year-end companies.
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Oil price continued its oscillation, pulling back to trade at $75.82 per barrel in the midst of weak economic signals from the world’s two biggest economies, even amidst fears that the Feds could raise rates again in this month, in the face of economic contraction and possible recession that is driving central banks rates hike. Just as Ukraine and Russia war continued. This is in addition to rising geopolitical tensions across the globe, the prevailing high interest rate regime and soaring inflation, despite slowing down across the globe remain potent threat to world economy. Also, supply tightened due to the Russia-Ukraine conflict that entered the second year. This up and down movement in oil price, has continued to drive volatility across markets.
Meanwhile, Tuesday’s trading opened slightly in the green and was sustained, despite oscillating throughout the session on the increasing positioning in blue chip stocks, large cap companies and profit taking. The situation pushed the NGXASI to an intraday high of 56,038.85bps, from its lows of 55,768.37ps, before closing above it opening figure at 56.038.85 point.
Market technicals were positive and mixed with a lower volume traded 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 100% buy position and 0% sell volume. The total transaction volume index stood at 0.50 points, just as momentum behind the day’s performance was strong, with Money Flow Index reads 81.78pts, from the previous day’s 82.35pts, indicating that funds left the market, despite closing high.
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Index and Market Caps
At the end of Tuesday trading, the benchmark NGXASI gained 232.14bps, closing at 56,038.85bps, from its 55,806.71bps opening level, representing a 0.42% growth, just as market capitalization rose by N126.40 billion to N30.51tr, from the previous day’s N30.39tr, which also represented a 0.42% appreciation in value.
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The day’s upturn was driven by position taking in the shares of Airtel Africa, GTCO, e-Tranzact, Transscorp Hotel, Nahco, May/Baker and Eterna among others, which impacted positively on Year-To-Date gain that increased to 9.34%. Market capitalization YTD gain went up to N2.98 trillion, representing 9.31% above its opening level for the year.

Mixed Sector Indices
Sectoral performance indexes were mixed, as the NGX Banking and Industrial Goods closed 0.05% and 0.02% marginally lower respectively, while the NGX Energy led the advancers after gaining 1.02%, followed by Insurance and Consumer goods with 0.57% and 0.21% respectively.
Market breadth turned positive as gainers outnumbered losers in the ratio of 27:22, while activities in volume and value were down after stockbrokers transacted 322.49 million shares worth N5.85bn, driven by trades in, UBA, Accesscorp, GTCO, Fidelity Bank and Japaul Gold.
e-Tranzact and Cornerstone Insurance were the best performing stocks, gaining 10% and 9.52% , closing at N4.40 and N0.92 per share, on impressive Q1 earnings and market forces. On the flip side, John Holt and Multiverse lost 9.88% and 9.54% respectively, closing at N1.55 and N3.70per share, purely on profit taking.

Market Outlook
We expect the mixed sentiments to continue on increased buying interests that needs confirmation, as portfolio realignments persist in the face of new government economic policies, in the midst of markdown dates, dividend payment and expected March year end audited accounts.
We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios post-dividend adjustments. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price rally to take profit. 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
Tel: 08028164085, 08179547605