…As Analysts Urge Investors To Trade In Stocks With Strong Fundamentals
Trading in the Nigerian Exchange (NGX) today reflected renewed buy-in interest in some blue chip stocks, as the NGX-ASI rebounded by 0.50%, closing at 97,783.81.
Additionally, the market recorded the listing of 93,950,000 units of NIDF, which contributed to the 0.52% increase in market capitalization, translating to a gain of N305.8 billion thus raising the total market capitalization to N59.2 trillion.
Some of the strong performing stocks during the day’s trading comprised ARADEL (9.23%), OANDO (5.40%), FBNH(2.20%), and WAPCO (1.72%) amongst others.
Data from the market’s supervisory group, the NGX Group, showed that the market’s short-term trading ratio (TRIN) dropped to 0.07 from 0.82 in the previous session, reflecting significantly improved positive market sentiment.
The key performance indices of the local bourse indicated that despite the share price gains of ARADEL and OANDO, the Oil and Gas Index declined by 0.50%, due to profit-taking in ETERNA (-6.94%) and JAPAULGOLD (-6.36%).
Similarly, the Consumer Goods Index also declined by 0.11%, impacted by the share price declines in UNILEVER (-9.97%) and HONYFLOUR (-4.08%), as investors continue to react to the sector’s macroeconomic challenges.
In contrast, the Banking Index, Insurance Index, and Industrial Goods Index appreciated by 0.74%, 0.23%, and 0.15%, respectively.
An analysis of the volume and value traded stocks showed a mixed sentiment. as total volume traded declined by 23.07%, settling at 632.7 million units, while total value traded appreciated by 5.11%, reaching N10.81 billion.
FBNH topped both the volume and value charts, accounting for 26.36% of total volume traded and 38.71% of total value traded, with 166.7 million units valued at N4.18 billion.
According to Bancorp Securities Limited’s experts, in terms of sentiment analysis, the market breadth closed at 0.97x, indicating a near balance between buying and selling pressure, with 29 decliners slightly outpacing 28 advancers.
However, they noted that the Up/Down (UD) ratio, which measures the volume of trades in advancing versus declining stocks, ended at a strong 3.26x, suggesting that despite the marginally negative market breadth, there was significantly stronger buying pressure in terms of trade volume compared to selling pressure.
On the broader market implications, the analysts maintained that the market’s gains today suggested renewed interest in stocks with lower prices, though caution remains in the broader market breadth.
They stated: “The index is above the 7-day and 20-day moving averages, showing short-term bullish momentum, but below the 50-day MA, which could act as resistance. A sustained move above the 50-day MA would confirm a bullish trend. We implore investors to trade in stocks with strong fundamentals.”
