The online investment clinic which held on the 18th of January 2023 offered investors free insights and analysis on the Nigerian equities market.
Speaking at the investment clinic, Head of Investment Research at Parthian Securities Limited, Oluwaseun Dosunmu, reminded investors that true to Parthian Securities’ earlier market predictions last year, the Nigerian equities market defied the odds in 2022, posting an upbeat performance despite the risk-off sentiments that rattled the global equities market.
He stated that the global central themes of 2022 were the Russian-Ukraine war, the zero covid policy in China, high crude oil prices, elevated inflation rates and the hawkish stance adopted by most central banks which made major economies experience a slowdown in economic activities, resulting in high cost of living and doing business. The Nigerian economy didn’t do better either as the key macroeconomic numbers were disappointing.
He forecasted that in 2023, the dominant events of 2022 will likely persist albeit with a mild twist. For the global economy, the tightening by the central banks would likely persist at a slower rate while in Nigeria, the forthcoming elections would ultimately determine the next direction of the foreign exchange (FX) market. In addition, it is expected that the inflation rate would decline due to the high base effect of 2022.
In addition to a credible and fair election, he listed low-interest rates, new listing/capital market reforms and strong corporate earnings as some of the factors that would drive market performance in the year.
“We are optimistic that in 2023, the equities market would continue the positive momentum driven largely by the dominance of domestic investors, better corporate earnings and lower interest rates. Favourable FX policies and a peaceful election would likely get foreign investors trooping into the country in 2023,” he said. He further explained that this is the right time to buy stocks as many investors would likely return to the market after the February presidential election, thus pumping the prices of equities.
Dosunmu cautioned that on the downside, continued monetary tightening, election violence and poor earnings of listed equities could trigger a negative outcome. He projected that 2023 will experience a continuous but slower monetary tightening and bullish oil prices, adding that some of the issues that defined economic performance last year would continue in the year but with some moderation.
According to the analyst, in 2022, Airtel and Seplat led the performance of the Nigeria equities with 71.2 per cent and 69.2 per cent returns respectively, followed by BUA Foods, BUA cement, and Geregu Power which was newly listed. He picked Airtel and Seplat again, alongside MTN, Zenith Bank, UBA, Nestle, Dangote Cement and Lafarge as stocks to watch this year with Nigerian Breweries and Total Energies also making the list.
Also, Chief Operating Officer of i-invest, an investment app of the Parthian Group, Tobi Olusoga, enjoined investors to consider flexibility and diversification in the management of their investment portfolios. She explained that i-invest would help investors to achieve this in a safe, secure, and convenient way.
“With i-invest, investors can access an array of competitive investment opportunities such as Treasury Bills, Commercial Papers, Fixed Deposit Notes, Eurobonds, and much more. They can also buy and sell shares on the Nigerian Exchange (NGX) without the aid of a broker, create one-off or reoccurring saving plans and accrue interest at attractive rates,” she said.
Bears & Bulls Series is an initiative of Parthian Securities, a subsidiary of the Parthian Group, created to empower people looking to invest in the equities market with the vital knowledge and resources to help them ace their investment goals and make valuable gains.