Group gives investment tips on equities, others

Parthian Group has advised investors to stay liquid, take advantage of specific equities and invest in dollar assets and placements.

The fixed-income, equities market and structured finance group gave the advice at the February 2023 forum of the Finance Correspondents Association of Nigeria in Lagos on Wednesday.

The Head of Investment Research, Parthian Securities, Oluwaseun Dosunmu, and Head, Global Markets at Parthian Partners, Ronke Akinyemi, gave investment advice at the event with the theme, ‘Assessing Nigeria’s financial sector and outlook for the economy in 2023’.

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

“The dominance of domestic investors in the Nigerian equities market is a good development because it shields the market from the impacts of funds outflow from emerging markets and global headwinds,” he said.

On what to expect from the market to guide investment decisions, Akinyemi said there would be public-private partnerships to reduce pressure on budget funding.

She noted that there would be debt issuances on the back of these partnerships and opportunities to invest in these issues.

Akinyemi said, “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.”

Generally, the investment expert noted that the market was expected to be largely driven by political transitioning, oil price fluctuations, trade wars, possibility of interest rate hikes by other economies and risk off/on sentiments.

According to her, the Monetary Policy Rate was likely to increase and credit conditions may remain tight in Q1-23.

The experts said there would be increased financial speculation and weakened investors’ confidence.

Akinyemi recalled that after the Q2-2022 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.

As such, the stock market created a massive opportunity for bargain hunting from mid Q2 to Q4 2022, pushing the 2022 year-to- (YTD) return to 19.98 per cent, she said.

On a positive note, she said there was improved growth level as the economy began to recover from the impact of the pandemic.