NGX Weekly Market Commentary – Week Ending April 17, 2025

This week, the Nigerian equities market delivered mixed signals, grappling with sector rotations, volatile banking sector performance, and persistent macro pressures—chief among them the 2.01% depreciation in the Naira to N1,605/USD. The All Share Index (ASI) ended marginally lower by -0.27% at 104,242.40, pulling back YTD gains to 1.03% (from 1.56% last week), suggesting investor caution and bouts of profit taking. The market saw lackluster breadth with 46 advancers against 46 decliners, yielding a neutral Breadth Ratio of 1.0x. Turnover was slightly higher (+1.87% in value traded), but trade counts and volumes slid (-5.29% and -10.29% respectively), indicating lower participation and more selective activity—reinforced by the dominance of institutional investors in trade value (over 86%).

Key Market Breadth & Trend Analysis

• Market Breadth: Even split between advancers and decliners — a classic sign of indecision. Only 3 stocks hit new highs; zero new lows — a subtle positive with the market pausing after a stretch up.
• Turnover & Participation: A 1.87% rise in value traded but with 10.29% less volume and fewer deals hints at rotation into larger-cap, higher-value names but with thinning enthusiasm among retail traders.
• Breadth Percent: 51.4% of issues traded higher, suggesting slight positive sentiment beneath a flat index.

Top Gainers & Losers – Week-to-Date Highlights

Noteworthy Data Points & Market Insights

• ABBEYBDS stands out with a 32.94% WTD gain and a 198.67% YTD surge. RSI at 99.82 (extreme overbought) suggests caution—profit-taking may be imminent. The move is propelled by momentum, but current levels are likely unsustainable.
• NEWGOLD ETF and VSPBONDETF feature both as WTD gainers. NEWGOLD has 71.8% YTD gains—evidence of a flight to safety and inflation hedge amid naira weakness. VSPBONDETF rallies but is still -28.3% YTD; trend followers may be betting on reversal after a deep slump.
• NIGERIAN BREWERIES (NB) shows signs of bullish reversal: WTD +13.13%, YTD +13.13%, and overshoots RSI 72.1 (overbought).
• CORNERSTONE INSURANCE (CORNERST): WTD -10.69%, YTD -34.60%, low RSI (26.86). Combined with high dividend yield (5.28%), this could attract bargain hunters, but technical momentum remains bearish.
• ZENITHBANK and GTCO (both top WTD losers, high YTD volatility): bear pressure matched by outflows and negative sentiment towards the banking space—corroborated by sector index performance.

Bullish & Bearish Momentum Detection (RSI, MACD, Moving Averages)

• Bullish Momentum:
  • ABBEYBDS: Extreme overbought (RSI 99.8), strong positive MACD, 15D MA (↑ 5.79) > 50D MA (↑ 4.16) — but risk of near-term pullback.
  • NB (NIGERIAN BREWERIES): Overbought (RSI 72), bullish MACD crossover, 15DMA ˜ 50DMA—may be at the early phase of outperformance if the upturn is sustained.
  • NEWGOLD ETF: Momentum continues (strong MACD histogram, 15DMA > 50DMA), capital flight into hard assets, fueled by weak naira.
• Bearish Momentum:
  • CORNERST: RSI <30 + negative MACD + 15DMA < 50DMA—a textbook bear momentum setup.
  • ZENITHBANK, GTCO, DAARCOMM: Persistently low RSI (<41), negative price action, and moving averages breakdown—banking sector’s trend bias is downward.
  • CILEASING: RSI in low 30s, negative MACD, YTD & WTD both negative, breakdown below MAs: caution!

Year-To-Date (YTD) & Week-To-Date (WTD) Top Performers

Indexes Performance – Weekly & Year-to-Date

• Growth stocks (NGX MERI GROWTH) were the clear leaders, up 4.79% WTD and 6.74% YTD, signaling renewed risk appetite and possible migration from value/banking into consumer and select industrial names.
• Consumer Goods sector continues to rebound (+2.31% WTD, +5.59% YTD), likely benefitting from repositioning amidst banking sector stresses and the inflation/naira scenario.
• Pension-linked indexes (NGXPENSION & NGXPENBRD) are quietly outperforming the broad market, a sign of defensive positioning.
• Banking and Insurance indices sharply underperformed: NGXBNK -3.51% WTD (-1.12% YTD), NGXINS -1.99% WTD (-20.61% YTD) — this aligns with the top loser table and macro worries.
• Oil & Gas index eked out a small gain WTD (+0.39%) but remains deeply negative YTD (-10.64%).

Retail vs Institutional Market Activity

• Institutional dominance: Institutions contributed only ca. 11% of trades by count but accounted for 67.1% of volumes and a massive 86.5% of value, confirming preferences for larger, more liquid, blue-chip names.
• Retail trades: Lower volumes and lower value-per-trade (indicates smaller trade sizes, less conviction or risk aversion post recent pullbacks).

• Overlap between institutional and retail focus: ACCESSCORP, ZENITHBANK, GTCO, and UBA are persistently among the most traded for both cohorts. However, most banking giants faced negative price action in the week, suggesting institutional rotation or risk aversion may be leading the recent sell-off.
• Unusual volumes (FIDELITYBK): Institutions significantly increased volume traded here, and WTD price action was +5.77% amidst high dividend yield (5.48%). This may signal early accumulation for a yield play or belief in fundamentals versus sector peers.
• Insurance sector names (REGALINS, CORNERST, GUINEAINS): High yields but weak price action suggest that yield alone is not enough to reverse negative sentiment in troubled financials.

Hidden & Subtle Insights

• Yield searching is selective: Stocks with high dividend yields but underpressure (e.g., LEARNAFRCA, CORNERST, CILEASING) are not attracting support—traders should be wary of "falling knife" dividend plays unless momentum shifts.
• Banking stocks: Despite representing the bulk of value/volume, all the big banks (GTCO, ZENITHBANK, UBA, ACCESSCORP) trended down or displayed low RSI and bearish momentum. Possible implication: Institutional flows may be driven by forced rebalancing (not value buying), and the bottom may not yet be in.
• Momentum inflections: ABBEYBDS and NB show that sharp price surges can coincide with extremely high RSI — caution is warranted as these "overbought" levels often retrace sharply.
• ETF flows: The appearance of the NEWGOLD and VSPBONDETF among WTD gainers with strong volumes may be a sign that investors are hedging against naira depreciation and macro uncertainty via inflation-resistant asset classes.
• Sectors in focus:
  • Growth/consumer sectors are attracting new risk capital; defensive pension funds are quietly increasing sector weighting.
  • Banking, insurance, and value indexes are in a corrective phase—momentum favoring "growth" and "safe haven" assets rather than conventional blue chips.

Actionable Ideas & Suggestions for Traders

• Momentum chasers: Consider partial profit-taking on names with "overbought" RSI (>80) such as ABBEYBDS and NB. Re-enter after a technical pullback if long-term story is favorable.
• Yield hunters: Do not blindly bottom-fish yield. Favor stocks where YTD/WTD price moves turn positive and momentum indicators like RSI/MACD stabilize above 50.
• Macro hedging: Keep an eye on ETFs or hard asset proxies (e.g., NEWGOLD) for further inflows if the naira continues to slide.
• Banking sector: Wait for RSI/volume to stabilize and MACD to turn before scaling in. Bargains may still be found, but technical confirmation is needed.
• Institutional flows: Watch for volume spikes in YTD outperformers showing technical breakouts—these are likely to see further institutional support.
• Sector rotation: Move with the sector flows—growth/consumer themes are outperforming, while value and financials take a breather.

Summary Table: Sector Index Weekly & YTD Performance