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Bulls take charge of market activities as earning season persists

The earnings season which characterized trading at the Nigerian Stock Exchange since the beginning of the last quarter of the year is expected to continue this week with the bulls taking vintage positions.

This is attributable to expectation of more positive macroeconomic indices, after the September consumer price index recorded a further decline for sixth straight month to 16.63per cent, from the 17.01per cent reported by the National Bureau of Statistics (NBS) for the month of August.

Cheeringly enough, the Nigerian equities closed higher last  week  as the benchmark index extended its rally for the fifth successive week on very high traded volume and positive investor vibes.  

Not minding the Tuesday public holiday declared by nthe Federal Government to mark Eid El Maulud, market analysts are on a consensus when they observe that as the markup phase continues to support the recovery moves in the market, this period calls for an effective combination of fundamental and technical analysis by investors willing to stay ahead of the market. Such investors they say must also be armed with a technical toolbox to help time the market and tell the entry and exit points, as well as trading chart patterns that would identify levels of breakout or breakdown. These technical tools are applied on the general market, sector rotation, and stock selection.

These are indications that confirm the daily move and volatility, as the NGX index is set to breakout new resistance levels of 41,781.10 basis points to 42,442.14bps and then confirm the continuation of the uptrend on the daily and weekly chart. So, we have to wait and see what happens in the new week, and ahead of more corporate earnings.  

The rise in transaction volume for the week ended October 15, 2021 due to heavy trades in FBN Holdings and others are indications that smart money is gradually returning to the market after studying the latest macroeconomic data and happenings in the fixed income market ahead of earnings reporting season and year-end seasonality. Also, liquidity is returning to the stock market, with the reintroduction of market makers to provide liquidity to the bourse, just as the oil price is looking up at the international market to support the market and economic fundamentals.

For the week under review, the market  All-Share Index grew by 569.79 basis points, closing at 41,438.15bps, which incidentally was the intra-week high and a low of 40,596.58bps, from the week’s opening figure of 40,868.36bps on positive sentiments for low, medium, and high priced stocks. Market capitalization during the period rose by N328.96bn, closing at N21.62tr, compared to the previous week’s N21.30tr, which also represented a 1.42% value gain. The difference between the index and capitalization movement arose from previous week’s successful listing of 1.96 billion ordinary shares of 50 kobo each at N16.15 per share by way of introduction on the main board of the Nigerian Exchange Limited, in favour of NGX Group on Friday 15 October 2021.

The last week’s top advancers’ table was dominated by low and medium-priced stocks which had become the toast of bargain hunters, particularly Champion Breweries, FBNH, Okomu Oil, Presco, International Breweries, and Honeywell Flour Mills, among others. This was due to the positive economic data and the continued repositioning of market players ahead of the Q3 earnings reports and Q4 seasonality. Also, the NGX Index and price actions revealed the presence of buyers in the market, a situation that reflects on the sectorial indexes.

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