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Absence of foreign investors shield market from global headwinds – Analysts

Experts from Parthian Group have said that the dominance of domestic investors in the Nigerian equities market is a good development that helped to shields the market from the impacts of funds outflow from emerging markets and global headwinds.

They advised investors  to stay short and liquid,  take advantage of higher yields and invest in dollar assets – Eurobonds as well as dollar placements bearing in mind that

the rules about diversification still stands.

Speaking at the February 2023 forum of the Finance Correspondents Association of Nigeria ( FICAN) on the theme “Assessing Nigeria’s Financial Sector and Outlook for the Economy in 2023,” the duo Mr  Oluwaseun Dosunmu, Head of Investment Research, Parthian Securities and Ronke Akinyemi Head, Global Markets at Parthian Partners  offered a willing and discerning an idea of where investors should  be investing in 2023.

They also  agreed that there will be increased financial speculation and

weakened investors confidence.

In his presentation, Mr.Dosunmu said those with interest in equities market should focus on  top 20 fundamentally strong stocks in terms of market capitalization in the Nigerian Exchange; stocks that are liquid and those that pay good dividends.

On what to expect from the market that will guide investment decisions Mrs. Akinyemi said there will be Public-private partnerships to reduce pressure on budget

funding, just as there will be debt issuances on the back of these partnerships and opportunities to invest in these issues.

“Uptick in interest rates is however anticipated in second quarter, resulting from a reduced level of liquidity and huge budget deficit.

“We expect the market to commence this year with some depression in yield, owing to expected liquidity elevation in first quarter.”

Earlier, Akinyemi had recalled that after the second quarter of-2022 selloffs triggered by higher interest rate in the fixed income market, the Nigerian stock market was volatile with many stocks trading at substantial discounts and delivering greater dividend yields than fixed income space.



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