Reversal Ahead On NGX, As Investors Position On Pullback, MPC Outcome

 

Market Update for the Week Ended Sept 17 and Outlook for September 20-24

Last week was packed full of activities that influenced the Nigerian Exchange benchmark All-Share index action with mixed trading and trend to close the period marginally positive on a low traded volume and negative breadth that halted the previous weeks of bear-run while calming the fear of a possible hike in Treasury Bill rates. During the week also, data from the National Bureau of Statistics (NBS), showed a further mild decline in inflation rate for the fifth consecutive month, just as the Central Bank of Nigeria’s Monetary Policy Committee held its regular meeting, with members voting to hold all the monetary policy instruments unchanged. This was to ensure the relatively low cost of funds necessary to support the ongoing national economic recovery.  Given the positive economic data and news from the flat TB offer rates, and MPC meeting outcome, we expect a breath out from the market ahead of the month and quarter-end window dressing and portfolio reshuffling to drive price and general performance.

As events are unfolding, this is the time for investors to rethink and change their trading strategies by looking at the way of companies that depend less on imported raw materials, or have done full backward integration. The ongoing development in the foreign exchange market is likely to affect the performance of companies, especially those engaged in manufacturing and that depends mainly on imported raw materials.

The low traded volume for the week is an indication that investors are seating on the fence, while funds exit the market, as revealed through the weekly money flow index and other investment windows compete for these funds. It is also worth noting that this is happening on the back of the ongoing devaluation that has seen the Naira at almost N600/$1 in the black market, a situation the CBN is trying to address with the plan to unveil the eNaira on October 1.

Last week also, Governor of the CBN, Godwin Emefiele, while fielding questions during the presentation of the communiqué issued at the end of the MPC meeting, accused AbokiFX, an online currency data platform of crashing the Naira, by posting false exchange rates and carrying out an illegal activity that undermines the economy. As part of strengthening the Naira at the FX market, the government would drive strong industrialization that supports export, especially the production of cash crops and others for export to earn more forex. We also expect that the CBN would further improve liquidity in the FX market and relax the restriction of $100/month for FX transactions on naira debit cards for legitimate foreign transactions.

To navigate the rest of the quarter and year profitably, order for Investdata’s video on Technical Analysis Made Easy for Profitable Trading to 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 below

Movement Of NGXASI

NGX index action opened the week on a negative note, extending the previous week’s negative outing on a low traded volume to form an inverted hammer candlestick, reversing up on Tuesday when it gained a marginal 0.08%. This trend was sustained at midweek when the composite index recorded a 0.14% growth before pulling back on Thursday with a 0.17% loss but rebounded on Friday on the decision of the MPC meeting to retain all monetary policy instruments unchanged.  These brought the week’s cumulative gain to 0.06%, compared to the previous week’s 0.86% loss.

In all, the key performance index gained 22.09 basis points, closing at 38,943.87bps from its opening level of 39,921.78bps, after touching an intra-week high of 38,968.34bps from its lows of 38,858.01bps on mixed sentiments in highly-priced stocks and buying interests in medium and low cap equities. Also, market capitalization rose by N11.14bn, closing at N20.29tr, compared to the previous week’s N20.28tr, which also represented a 0.05% in value gain, with the difference resulting from the price adjustment in Access Bank for the 30 kobo interim dividend declared by its directors.

As usual, medium and low-priced stocks dominated the advancers’ table for the week, with investors positioning in UPDC, United Capital, Vitafoam, NNFM, Learn Africa, Fidelity Bank, Nahco, and Honeywell among others. This was due to continued repositioning of portfolios amid the market corrections and pullbacks on selloffs and profit-taking. Index and price actions revealed the presence of buyers in the market, a situation that is yet to reflect on the sectorial indexes.

Also, during the week, CAP listed additional 88.26m shares, resulting from the just concluded merger with Portland Paints bringing the company’s total share outstanding to 788.26m units.

Market breadth for the period was negative on low traded volume to resist the decline and signal the wait-and-see attitude of traders, with losers outnumbering gainers in the ratio of 38:21, on positive sentiments as revealed by investors’ sentiment report showing 78% ‘buy’ volume and 22% sell position. Money Flow Index dropped slightly to 57.32bps from the previous week’s 63.36 points, an indication that funds left the market.

NSEASI WEEKLY CHART MOVEMENT

NGX index’s action has formed a hammer candlestick after two successive weeks of decline to reveal the possibility of a reversal in trend in the new week, as the index action remained within a consolidating rectangle and on a strong support level.  The candlestick formation indicates the return of strength as bargain hunters buy in the pullbacks, but we need to watch out, as market players digest economic data, fixed income market yields, and outcome of MPC meeting that should further support market fundamentals to attract liquidity to the equity space.

Bearish Sectoral Indices

All the sectorial performance indexes were down, led by the NGX Oil/Gas which lost 3.35%, followed by Banking, Insurance, Industrial and consumer goods with 0.79%, 0.58%, 0.24%, and 0.21% respectively. Transactions in volume and value terms were down, with investors exchanging 856.29m shares worth N10.75bn, compared to the previous week’s 1.43bn units valued at N13.07bn. Volume was driven by Financial Services, Consumer Goods, and ICT, particularly Access Bank, Universal Insurance, Wema Bank, Zenith Bank, and GTCO.

UPDC and United Capital were the best-performing stocks during the week, after gaining 11.80% and 11.25% respectively, closing at N1.80 and N8.90 per share respectively on positive market sentiments and forces. On the flip side, SCOA and Transcorp Hotel lost 18.46% and 10% respectively, at N1.06 and N4.50per share, purely on selloffs and profit-taking.

Outlook for the week

We expect a mixed trend as bargain hunters take advantage of pullbacks in fundamentally sound stocks to position, just as players digest August inflation data, TB primary market auction rates, and the outcome of last week’s MPC meeting. As many stocks enter their buy range to attract funds into the equity space.  Also, investors are still observing the interplay of forces in the FX market as the CBN gives a guideline for the new digital currency platform. Last week’s low volume suggests that institutional investors are yet to enter the market and others are still trading with caution. It is noteworthy that oil prices rebounded to trade above $71 in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.

INVESTDATA Q4 MASTER CLASS OPEN FOR REGISTRATION

Theme Road To Wealth: Avoiding Financial Lockdown In Q4 & Beyond

Sub-Topics

 The Power of Earnings: Best Trading Strategies To Grow Your Portfolio, By (AlhajiGarbaKurfi, MD/CEO, APT Securities & Funds Ltd)

The Road Ahead For The Economy & Impact of PIB On Equity Market, By Mr. AbiolaRasaq, CSCS).

 Classical Chart Patterns For High Powered Profits In Any Market Cycle, By Mr. Ambrose Omordion, Chief Research Officer, Investdata Consulting Ltd

Are you interested in building wealth and improving your trading results through tested and effective investing strategies for the rest of the year and beyond? Smart domestic investors, like Aliko Dangote, Jim Ovia, Tony Elumelu, TY Danjuma, and Abdul SamadRabiu, among others, recognise the power of creating wealth through stock trading and investing.

This Q4 masterclass is for you, because it will help you follow exact steps in real time and target one of the most active time frames in the market.  It doesn’t matter how the government is creating new money and credits, or what tricks they are employing, or how they spin them ….

Nigeria has entered one of the greatest inflationary periods despite the seeming slowdown in the last four months. Inflation is not a threat. It is government policy from this point forward that will push million of Nigerians down …. Out of the middle class…out of private retirement, healthcare and decent lives, based on independence and privacy… into a collective nightmare we call financial lockdown.

This is what happens when people are trapped by their own collapsing currency, such that they become deeply indebted. Inflation causes huge distortions in the economy and in the markets, so its critical that you take the necessary steps to ensure you are not left behind.

We have put together this Q4 masterclass to help market players avoid those needless losses and build a profitable portfolio that has high ROI…… Especially in a volatile market, when you don’t know which way up….

Participants will learn the following

How to trade earnings to boost their portfolio bottom line

The relationship between equity price movement and power of earnings

The road ahead, which sector and industry have the potential to drive profit that will support equity prices

How to simplify price action analysis on any time frame

How to filter out market noise and identify the most opportune time to join any market

Tradeable chart patterns and candlestick formations that signal real money making opportunities

 Trend trading secrets for profitable trades and minimal risk

Five hot stocks that beat inflation and deliver over 25% in 90-day investment windows.

Date: October 2. 2021

Time: 9 am Prompt

Fee: N50,000 per participant

Venue: ZOOM

However, with less than 12 days to Q4 Master class October 2, 2021, you need to make money and avoid financial lockdown, boost your trading bottom line. Don’t miss this opportunity.

During this practical session our top industry experts will reveal profitable trade ideas and opportunities in Q4 to consolidate your gains and ride on year-end seasonality to maximize returns. That is what you can implement immediately to start tracking the result by yourself and the investdata Research team on your behalf. You definitely want to be among the smart traders and investors in Q4. So, send “YES” or “STOCKS” to 08028164085 and 08179547605.

Meanwhile, the home study packs on Comprehensive Stock Market trading course video,Stock Market Analysis Beyond Fundamental & Technical Analysis,  INVEST 2021 New Opportunities & New Paths To Profits Summit materials and 10 Golden Stocks for 2021, Strategies and How to invest profitably in this Changing Market Dynamics/ Recession, Mastering Earnings Season For Profitable Investing and Trading in any market situation/ cycles, Life Beyond COVID 19 Investment Opportunities In The Stock Market are now available. To obtain your pack send ‘Yes’ or ‘Stock’ to 08028164085, 08179547605 now.

Ambrose Omordion

CRO|Investdata Consulting Ltd

info@investdataonline.com

info@investdata.com.ng

ambrose.o@investdataonline.com

ambroseconsultants@yahoo.com

Tel: 08028164085, 08179547605

https://investdata.com.ng/reversal-ahead-on-ngx-as-investors-position-on-pullback-mpc-outcome/