What investors should expect in 2022 – Meristem
Meristem Securities Limited has given the outlook of the economy for 2022, drawing investors’ attention to what they should expect in the New Year.
The company recently organised a webinar themed: “Beyond Clangs and Chatter – Going for Gains”, to lay out the expectations for the year and help attendees make smart and informed investment decisions given the uncertainties about the Nigerian economy.
Ahmed Jana, head of Research at Meristem Securities Limited expects that there would be less injections into the global economy in 2022 compared to the last two years as the fiscal burden weighs on Government resources.
He was of the opinion that the domestic monetary policy stance would remain accommodative to support the continued growth of the economy. Thus, he recommends a dynamic portfolio of both equities and fixed income instruments to take advantage of inevitable swings in the market.
Assessing whether the current selloffs in US equities will filter into the domestic equities markets, he adds that the major driver of the sell-offs in the US equities market is the reallocation of funds to less risky assets by investors in the expectation of rate hikes by the US Fed.
Also, the initial rally on tech stocks due to massive growth forecast in the wake of the pandemic has waned, contributing to the sell-offs. However, he does not expect these factors to drive the Nigerian equities market, as he expects the low fixed income yields to favour the performance of equities.
Franklin Ngwu, director at the Lagos Business School, spoke about the impact of supply-side constraints, the growth drivers and the likely events that would shape the pre-election year.
He emphasized the impact of supply-side imbalances noting the importance of addressing the insecurity challenge, especially given its impact on the agricultural sector. He stated further that the supply-demand disequilibrium is fueling inflation.
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He also observed that the growth drivers in the Nigerian economy are the financial services, agriculture, telecommunications, manufacturing, and construction sectors.
Another Speaker at the Webinar, Oluseye Olusoga, MD, Parthian Partners limited also pointed to the likely impacts of the postponement of fuel subsidy and the ripple effect of the Fed’s rate hike in the Eurobonds market.
He mentioned that the uptrend in the price of crude oil together with the indefinite suspension of subsidy would lead to lower remittances from the NNPC to the Federation Accounts, which could mean less revenue for the Government.
He noted that the expected increase in rates by the Federal Reserves in the US would put upward pressure on borrowing costs, especially in the Eurobonds market. This could make the Federal Government look more to the local debt market for funding the deficit in the 2022 budget.
The Webinar, which was attended by both Nigerians at home and in diaspora provided attendees with valuable insights and forecasts for the year.
Industry experts joined subject specialists from Meristem to provide insights cutting across the global and domestic macroeconomics and strategies for investors to achieve their financial objectives in 2022.
Meristem Securities Limited is a leading Asset and Wealth Manager with over 18years experience in building and growing wealth for its clients. The company also operates its stockbroking activities via Meristem Stockbrokers Limited. The organisation prides itself in growing wealth for Nigerians in an atmosphere of transparency.