The report highlighted key drivers to the GDP growth, citing elevated crude oil prices, sustained high interest rates and a stable crude oil output between 1.3mbpd and 1.5mbpd. Nigeria’s gross domestic product (GDP) is projected to grow by 3.1% in real terms in 2024, higher than the 2.74% recorded in 2023.

In retrospect, the report noted that the Nigerian economy demonstrated resilience in the first half of 2024, navigating through numerous macroeconomic challenges despite facing significant headwinds such as high inflationary pressures, increased foreign exchange (FX) volatility, insecurity, dwindling reserves, and fluctuations in foreign investments.

However, real GDP printed a growth of 2.98% in Q1 2024, an increase compared to 2.31% recorded in the corresponding period of 2023, although lower in contrast to 3.45% recorded in the previous quarter.

Meanwhile, economic growth has been largely driven by the services sector combined with a rebound in the oil sector, on the back of improved crude output.

ICT and banking drives growth as industrials suffers

The Nigerian industrial sector, once considered a cornerstone of economic development, comprising mining and quarrying, manufacturing, electricity, water supply, and construction subsectors has faced significant challenges in recent years, leading to tepid growth and low GDP contribution, in contrast to the likes of services and the agricultural sector.

• According to the report, inadequate infrastructure remains a critical hurdle for the industrial sector, ranging from insufficient power supply, unreliable transportation network, dollar supply crunch, and high cost of credit.
• In recent years, the sector has also suffered from low investment, while witnessing some exits like the divestments of GlaxoSmithKline (GSK), Shell, Kimberly-Clark, and Diageo in the first half of the year.
• The services sector on the other hand has recorded impressive growth, driven by the ICT and banking sectors, both growing by 5.43% and 33.3% respectively in Q1 2024.

The report highlighted the harsh economic consequences emanating from the several reforms implemented by the government in the last year, for example, the high cost of credit, increased poverty rate, and erosion of corporate earnings especially in the manufacturing and ICT sectors.

On the flip side, some of the positives that have been recorded as a result of the reforms such as improving foreign reserves level, improved capital importation, increase in FAAC allocations to the three tiers of government amongst others.

Other projections

The report indicated an expectation of tapering inflation rate albeit at elevated levels.

“We anticipate that inflation will persist at elevated levels, driven by factors including supply chain disruptions, currency depreciation, and rising production costs. Consequently, interest rates are likely to remain high in the short-to-medium term, as the Central Bank of Nigeria (CBN) continues to employ tight monetary policy to tame rising inflation and ensure FX stability.”

“In terms of foreign exchange dynamics, we anticipate the exchange rate to oscillate within the range of N1,400 to N1,500 against the US dollar, driven in part by the CBN’s efforts to attract foreign portfolio investments (FPIs) and normalize the FX market. This anticipated narrow band is expected to provide some respite to businesses and investors, aiding in planning and decision-making processes,” the report noted.

The Group Managing Director/CEO of Norrenberger, Tony Edeh commented on the report saying, “The NEO report provides a comprehensive analysis of the Nigerian economy, highlighting both challenges and opportunities. It is our hope that this report will serve as a valuable tool for businesses, investors, and policymakers in navigating the complex economic landscape.”

About the report

The Norrenberger Economic Outlook (NEO) report for H1 2024 is a comprehensive review of the Nigerian economy in the first half of the year, highlighting various changes across different markets and offering an outlook for the rest of the year.

The report is designed to help readers gain invaluable insights into monitoring pivotal economic drivers and navigating fiscal pressures.

Additionally, the report delves into the economic landscape and potential of various states within Nigeria, identifying dominant and thriving sectors in the economy. From agriculture in the northern regions to technology hubs in the southwest, and oil production in the Niger Delta, the report highlights opportunities that transcend the immediate impacts of the current reforms.

Notably, the report not only examines the current economic conditions and the effects of recent policies but also identifies future opportunities within the Nigerian economy. It serves as an essential guide for investors and stakeholders aiming to make informed decisions in a complex and evolving economic environment.

Click this link to download the full report: https://tiny/NEObeyondthereforms

About Norrenberger 

Norrenberger is a financial services Group providing bespoke financial solutions that add value to our individual and institutional clients. With a team of experienced professionals, Norrenberger offers a comprehensive range of services, including asset management, private equity, development finance, investment banking, securities trading, pensions, insurance, fintech and digital banking.

Our component companies are licensed, authorised and regulated by either the Securities & Exchange Commission (SEC), Central Bank of Nigeria (CBN), Nigerian Exchange Limited (NGX), National Pension Commission (PenCom) or National Insurance Commission (NAICOM).

Website: www.norrenberger.com

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This represents a remarkable 29.6% increase over five months, rising from N2.26 trillion at the end of December 2023 to N2.9 trillion by the end of May 2024, which could also be partly attributed to the impact of naira devaluation on dollar-denominated funds.

Meanwhile, the growth trend highlights a strategic shift by Nigerian investors seeking to hedge against rising inflation and exchange rate volatility. The inflow into mutual funds is particularly noteworthy as investors look for high-yielding low-risk opportunities, gravitating towards fixed-income and dollar-denominated instruments.

For instance, the recent Treasury bills auction closed at a discounted rate of 20.67%, offering an annual yield of approximately 24% to investors. This attractive yield contrasts with the downturn in the local equities market, which has seen a quarter-to-date loss of 5.03% by the end of May although a year-to-date gain of 32.8%.

The growing preference for mutual funds amid market volatility underscores a broader strategy among Nigerian investors to seek stability and higher returns in a challenging economic environment.

This article analyses the best performing mutual funds across four categories based on yields as of the end of May 2024 based on data from Fund Managers Association of Nigeria (FMAN). The mutual fund categories include, money market fund, dollar mutual fund, fixed income fund, and halal mutual fund.

Noteworthy, is the domination of the likes of Norrenberger, Emerging Africa, and Meristem in the ranking.

Best performing money market funds

Money market funds are mutual funds that invest exclusively in short-term debt securities like treasury bills, bank placements and commercial papers. These funds provide investors with a low-risk option for short-term cash management and capital preservation.

As of 31st May 2024, the average yield on money market funds stood at 17.19%, representing a significant jump compared to 10.2% recorded as of the beginning of the year. Below are the top performers based on yield as of the end of May 2024.

• Emerging Africa MMF – 20.96%
• Coral MMF – 20.21%
• Meristem MMF – 20.18%
• FBN MMF – 20.05%
• Norrenberger MMF – 19.96%

Best performing dollar mutual funds

Dollar mutual funds are collective investment schemes that invest in dollar-denominated financial assets, giving investors exposure to international markets and currency diversification.

These funds provide an opportunity for investors to hedge against currency risk and take advantage of global investment opportunities in foreign currencies. Data shows that the yield declined from 7.7% as of December ending to 5.46% by the end of the review period. Below are the best performing dollar-denominated mutual funds:

• Norrenberger Dollar Fund – 10.07%
• Emerging Africa Eurobond – 9.62%
• Meristem Dollar Income Fund – 9.22%
• CHD Nigeria Dollar Income Fund – 9.08%
• Stanbic IBTC Dollar Fund – 7.43%

Best performing fixed income funds

Fixed income funds are mutual funds that primarily focus on debt securities. They offer investors a diversified portfolio of bonds and other fixed-income instruments, aiming to generate stable income streams while preserving capital.

Average yield on fixed income mutual funds rose to 8.31% by the end of May 2024, almost 200bps higher than the 6.24% recorded as of the beginning of the year.

• Emerging Africa Bond Fund – 19.49%
• Meristem Fixed Income Fund – 16.19%
• Norrenberger Turbo Fund – 13.6%
• Chapel Hill Denham Nigerian Bond Fund – 11.76%
• Cardinal Stone Fixed Income Alpha Fund – 11.75%

Best performing Halal mutual funds

Halal mutual funds are collective investment schemes that follow the principles of Islamic finance by investing solely in Shariah-compliant instruments. These funds provide investors with the chance to align their investments with their ethical and religious beliefs, while pursuing competitive returns in accordance with Islamic principles.

The average yield on halal mutual fund stood at 7.97% as of the end of May 2024.

• FSDH Halal Fund – 12.58%
• Norrenberger Islamic Fund – 11.42%
• United Capital Sukuk Fund – 9.82%
• Codros Hala Fixed Income Fund – 9.69%
• FBN Halal Fund – 5.8%

Why consider mutual funds

Mutual fund investments offer several advantages for individuals. Firstly, they allow investors to diversify their risk across a variety of assets. Additionally, mutual funds are professionally managed, providing investors with expert supervision and advice. Furthermore, they offer flexibility and convenience, catering to different risk tolerances and investment objectives.

Source: Nairametrics

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The U.S. dollar, often regarded as the world’s primary reserve currency, serves as a benchmark for global trade and financial transactions. Nigeria, like many other nations, relies on the dollar as a key medium for international commerce. Most international trade deals, including Nigeria’s crucial oil exports, are conducted in dollars, making the value of the dollar inherently linked to the health of the Nigerian economy. 

Currency Fluctuations and Exchange Rates  

Currency fluctuations play a significant role in shaping Nigeria’s economic landscape. The local currency, the Nigerian naira, often faces challenges as it fluctuates against the dollar. Exchange rate movements impact various sectors, including imports, exports, and inflation. A weaker naira relative to the dollar can continue to increase the cost of imported goods, contributing to inflationary pressures, while a stronger naira may improve purchasing power but potentially harm export competitiveness. 

Trade Dynamics and Dollar Dependency  

Nigeria’s economy is intricately connected to global markets, and the dollar’s dominance in international trade significantly influences the country’s economic activities. The oil sector, a crucial component of Nigeria’s economy, is particularly susceptible to fluctuations in the dollar. Since oil is priced and traded globally in dollars, changes in the dollar’s value directly impact Nigeria’s revenue from oil exports, affecting the government’s budget and the overall economic stability of the nation. 

Remittances and Foreign Direct Investment  

The Nigerian diaspora, a substantial and influential community, sends billions of dollars in remittances back home annually. The value of the dollar directly impacts the purchasing power of these remittances in Nigeria. Additionally, foreign direct investment (FDI) into Nigeria often involves transactions in dollars. A strong dollar may attract more FDI, while a weaker dollar may make investments in Nigeria more appealing for foreign businesses. 

External Factors and Economic Stability  

External factors, such as global economic trends, geopolitical events, and monetary policies in major economies, can influence the value of the dollar and, consequently, Nigeria’s economic stability. Fluctuations in the dollar’s strength may impact Nigeria’s ability to manage its external debt, as loans are often denominated in foreign currencies, exposing the country to exchange rate risks. 

Challenges and Opportunities for Nigeria  

While the dollar’s impact on Nigeria’s local economy presents challenges, it also opens doors to opportunities. Diversifying trade partnerships, promoting local industries, and implementing sound monetary policies are key strategies for mitigating the negative effects of currency fluctuations. Moreover, Nigeria can leverage its abundant resources and youthful population to attract foreign investment and stimulate economic growth independently of the dollar’s influence. 

In conclusion, the impact of the U.S. dollar on Nigeria’s local economy is multifaceted, influencing trade, inflation, and overall economic stability. As Nigeria navigates the global economic landscape, policymakers and stakeholders must remain vigilant, adapting strategies to harness the opportunities and address the challenges posed by the ever-evolving dynamics of the dollar. 

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Wealth preservation involves a strategic approach to safeguarding and growing one’s assets over time, protecting them from the negative forces of market volatility and unforeseen events.

Economic uncertainty refers to a situation in which the future economic environment is difficult to predict and there is a high degree of risk or unknowns involved. This can be caused by a variety of factors, including political instability, changes in government policies, micro- and macro-economic factors, and market fluctuations.
Economic uncertainty can lead to a decrease in economic activity as people and businesses become more risk-averse. The identified sources of economic policy uncertainty in Nigeria are frequent changes in the apex bank’s (Central Bank of Nigeria) policy, unexpected changes in government policy, political interference, an unexpected fall in the global oil price, and a recession.
In preserving wealth during economic uncertainty, one must consistently sustain the purchasing power of their wealth over the long term and ensure it is available for transitioning to future generations.
The major strategies used to preserve wealth in uncertain times are:

1. Financial Planning and
2. Portfolio Diversification

Financial Planning

Financial planning is a tool used to accumulate and preserve wealth. It involves an assessment of your current financial situation and creating a plan, specifically around the management of finances and preparation for the potential costs and issues that may arise.
Creating a financial plan is important because it allows you to make the most of your assets and gives you confidence that difficulties along the way will be surmounted.
Financial planning during uncertainty, particularly inflation, can be quite challenging; all it takes is discipline and consistency.

Steps to Financial Planning

1. Find a certified financial advisor. Consult with a financial advisor who can provide personalised guidance based on your specific financial situation and goals.
2. Review/Assess your current financial situation. This is required to evaluate your current financial standing. It includes the calculation of your net worth, and tracking your income, expenses, debts, and investments. Revisit your budget and look for expenses that can be reduced or eliminated.
3. Identify your goals – Your goals must be SMART 
   Specific: Clearly state your goal e.g. I will save N1m in 6 months which is 20% of my salary.
   Measurable: Ensure you can measure success. For instance: save N167,000 monthly.
   Achievable: Set goals you know you can achieve e.g. It is 20% of my salary and it is achievable.
   Releant: Set goals relevant to your life e.g. This helps with the payment of my house rent.
   Time-Bound: Set a deadline for completion e.g. 6 months.
4. Design a plan – Set up a structure. Do I invest in a mutual fund, or do I buy stocks? Do I set up a monthly direct debit?
5. Execute the plan – Set up an emergency fund by investing in the mutual fund. Set up a life and health insurance plan.
6. Review and refine – It is advisable to have a quarterly review of your investments and plan.

Portfolio Diversification

Portfolio Diversification is important in considering investments that have the potential to outperform inflation. Some of these investments include stocks, real estate, and commodities, and have been proven over time to protect the purchasing power of your assets.
Review your portfolio regularly and adjust your asset allocation when needed to stay on track toward achieving your financial goals.

Looking to speak to a financial advisor to help you preserve your wealth? Call us on 0700-NORREN, 234 (0) 908 781 2026 OR send an email to customerservice@norrenberger.com.

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Highlighted below are a  few things to put in place to ensure that sparks in your hearts match stats in your account. 

Planning for success: 

The journey of love often begins with shared dreams and aspirations. However, to ensure a lasting romantic connection, it’s essential to build a solid financial foundation. Budgeting, saving, and long-term planning are not just financial tasks but acts of love that strengthen the partnership. Couples who align their financial goals find themselves better equipped to weather the storms and celebrate the joys of life together. You can also start this journey by investing in Joint stocks from our pool of recommended stocks or put money down for a future couple’s goal in any of our competitive return asset funds [Insert link] 

The Romance of Financial Transparency:  

Transparent communication about money is the backbone of a healthy relationship. Breaking the stigma surrounding financial discussions opens the door to a deeper emotional connection. In this section, we’ll explore the importance of sharing financial details with your partner and provide communication strategies to foster openness and trust. 

Date Nights on a Budget: 

Contrary to popular belief, romance doesn’t have to come with a hefty price tag. Discover creative and budget-friendly date night ideas that not only save money but also enhance the romantic aspect of your relationship. From cozy nights into adventurous outings, these ideas prove that quality time together is the true essence of romance. 

Navigating Financial Conflicts with Love: 

Conflicts around money are inevitable, but they don’t have to jeopardize your relationship. In this section, we’ll discuss effective ways to navigate financial disagreements without compromising the emotional connection. Finding common ground, compromising, and understanding each other’s perspectives are essential elements in resolving financial conflicts with love. 

Planning for a Financially Healthy Future Together  

As love matures, so do the responsibilities and shared goals of a couple. Planning for the future as a team involves joint financial goals, investments, and retirement planning. In this final section, we’ll explore the significance of approaching financial decisions collaboratively and provide guidance on creating a roadmap for a financially healthy future together. 

In the intricate dance between love and money, finding the delicate balance requires effort, communication, and compromise. Reflecting on your financial situation and relationship dynamics can lead to proactive steps in building a stronger, more harmonious connection. As you embark on this journey, remember that the synergy between love and money is a dynamic force that, when harnessed with care, can create a relationship built to withstand the tests of time. 

The post Love and Money: Navigating the Delicate Balance Between Finance and Romance  appeared first on Norrenberger Asset Management Limited.

The Nigerian stock market posted a record 45.9 per cent growth as measured by the Nigerian Exchange Limited All-Share Index in 2023. The performance came to many analysts as a very big surprise. What can you say was responsible for this performance?

The year 2023 was indeed a mixed bag of emotions for investors in the Nigerian Stock market. Reason being that we had just come out from a pre-election year in 2022 where stock prices of major blue-chip companies were trading below their fair values. The apprehension of an election season 2023 also came with its negative sentiments as investors adopted a cautious approach to investing, shorting on stocks for liquidity preference. Participation of foreign portfolio investors was also on a low, so the market was starved of the required liquidity needed to drive demand and consequently, stock prices dipped. However, post 2023 elections and the fact that all predictions of doom and gloom came to nullity, this boosted confidence of investors in the market as once again, Nigeria had proven to be resilient politically despite her many challenges. The inauguration speech of the President of the Federal Republic of Nigeria also came with some pro-market sentiments that caused an instant positive reaction in the market and saw an influx of investors take long positions in fundamentally sound stocks which invariably caused a rally for the most part of the year. Policy statements around petrol subsidy removal, unification of the exchange rate etc. triggered investors appetite for these fundamentally sound stocks which were trading below their fair values. One other critical factor that drove activities in the stock market during this period was the dwindling interest rates in the money market, skyrocketing inflation rates nearing the 30% mark. In order to hedge again this rising inflation rates, investors turned to the stock market as that is a market that potentially can provide returns that exceed inflation rate and therefore help preserve investors capital.

It is often said that the stock market is the mirror through which an economy of a nation could be seen. But given the state of the economy in 2023 and the performance of the stock, how would you assess the correlation?
This assertion is quite apt and to a lot of market watchers, a mystery. In normal situations, the stock market actually is a barometer of the economy, but in our own peculiar circumstance, the disconnect rises from the fact that the factors driving activities in the stock market are at variance with what is happening in the real sector of the economy. All the factors earlier mentioned that drove stock prices could easily be predicted as a natural consequence to the policy statements made by the federal government. The market would always react to any information, be it good or bad. However, the reality in the real economy is that factors like rising inflation would still pose a significant challenge to the value of cash in the pockets of the average Nigerian. Issues around the country still being a largely import dependent nation that does not produce most of what it consumes persists. With the weakening Naira, it is always going to be a tough one for households and businesses. The purchasing power of the average Nigerian has been weakened significantly and consequently increased the misery index. Despite the bullish run in the stock market, the agelong fundamental issues plaguing the nation persists and this is a reason for the disconnect between investors excitement in the stock market versus the difficult times being experienced in the real sector of the economy.

Surprisingly, the market has maintained a bullish trend in the first month of 2024, how long can this positive trajectory continue. What are the sustaining factors?
The bullish run experienced in the second half of 2023 has unsurprisingly continued in this first quarter of 2024, one of the reasons being that following the passing of the 2024 budget into law, it is expected that government spending would stimulate economic activities in the various sectors, of which companies listed on the Stock Exchange in those sectors will be the better for it. Also, the earnings season are upon us and there is the anticipation by investors of good corporate actions that may arise from better-than-expected full year results. The activities of institutional investors such as the PFAs, Asset Management firms etc. has also helped drive activities in the market. Finally, the major participants in the market now are domestic investors and the market is yet to see an influx of foreign portfolio investors. Positions are also being taken on the mid to long term in expectations of another round of market rally when the foreign funds flow into the market. So, I expect to see periodic selloffs by investors who have hit their expected returns in the market, which would cause stock prices to dip, but then present an opportunity for bargain-hunters to take position in the market.

Despite the bull run in the secondary segment of the stock market, there was no corresponding upsurge in the primary market activities. Why was it so?
Sadly, activities in the primary market had not been as impressive as those in the secondary market. As a matter of fact, the market even experienced the delisting of about five companies in 2023. This could have been attributed to strategic decisions of the various companies and they cannot be begrudged for taking decisions in their best interest. Despite the recent bullish run in the market, there are investors who are still pessimistic about the market due to previous experiences and as such, Issuers fear that coming to the primary market to raise capital may not be so successful due to some investors’ apathy for the stock market. The fear of an equity capital raise failing is a major reason Issuers would rather go by way of debt issuances. However, there is an expectation that more primary market activities would occur this year by way of Rights Issues, Initial Public Offerings, Mandatory Take Overs etc. Of particular interest, would be to see the Dangote Refinery and maybe the NNPC get listed on the Stock Exchange. This will increase the market depth and improve investors’ confidence in the local bourse.

Although raising funding from the equities market is said to be relatively cheaper than the debt market, why are many companies not taking advantage of this to raise funds through equities issuances?
As earlier mentioned, one reason for the dwindling equity capital raise in the primary market is due to the fear of failure by Issuers. No company wants to come to the market to raise capital by parting with some of its shares and to not get it fully subscribed to. This can easily put the company in bad light that investors are not confident in its capacity to perform and are therefore not attracted to acquiring their shares. Also, equity capital raise means such a company is introducing many other investors to its company and public scrutiny of its performances would increase. For a company that wants to stay private, an equity capital raise may not be an option of them.

Despite the good performance of the stock market in 2023, which has extended to 2024, the market remained under patronized by investors considering our population, why is this so?
One major reason is that so many investors who had played in the stock market pre-2008 global meltdown, were not particularly savvy in the workings of the stock market. There was a massive bandwagon effect between 2006 and 2007, where investments were being made in the market without proper knowledge of how the market worked. Thus, during the 2008 global financial meltdown and the extended bearish run in the Nigerian Stock Market, some investors have not fully recovered from that experience. As a matter of fact, those who did not even play in the market then are using the stories of others to stay off the market. We also cannot discountenance the general economic hardship and its attendant effect on the purchasing power of citizens. It therefore is a tough ask to get people who are still trying to meet their basic needs, to part with scarce cash to invest in the stock market, which despite its high returns also comes with a high volatility.

What do you think should be done to make the market more attractive for investors because less than 10 per cent of the Nigerian population play in the market?
I believe a lot more of investor education is required across all strata of the populace. People need to understand the concept of investing in the stock market as a long-term investment, which over time can generate returns that hedge against inflation, thereby preserving their capital and creating wealth. Investors’ confidence would also be boosted when they are sure that there is a water-tight regulatory framework to protect their investments from any sharp practices in the market. This we must give credit to our apex Regulator, the Securities and Exchange Commission (SEC) and the Nigerian Exchange Group (NGX). Furthermore, more stockbroking firms must adopt the use of advanced technology in engaging with their clients, to provide a seamless engagement between their clients and the market. Finally, the issue around unclaimed dividends must be addressed as a matter of urgency, as it casts doubt in the minds of investors who invest in the market and have difficulties in getting their dividends.

Specifically, what is Norrenberger Securities Limited doing in this regard. Do you have products or strategies to onboard investors into the market?
Response: This is most definitely one of our unique selling points in this space, as we tout ourselves as simplifiers of wealth creation. At Norrenberger Securities Limited, we had identified this issue of unclaimed dividends as a major challenge for existing and intending investors who think that they may not get their dividends from their investments. Therefore, we created a service called the Norrenberger Heritage Service, where for all subscribers to this service, we help you recover all unclaimed dividends and even shares you did not know their whereabout. Some family members of a deceased loved one may not know that they may have hidden treasures in the large pool of unclaimed dividends more than N190 billion. At Norrenberger, we help clients unlock those treasures and work with them through the entire process of recovery and transfer of the assets to the beneficiaries of those investments. At Norrenberger Securities Limited, most of our engagements with our clients is technology driven. You can start the onboarding process online and buy and sell stocks online too. For every client of ours, we grant them access upon request to the Direct Market Access (DMA), which enables clients trade in the stock market themselves via their mobile devices or computers. We also believe in educating students in primary, secondary and tertiary institutions of learning to understand the fundamentals of financial management and investment. In this regard, we have a School Investment Club wherein we partner with a couple of schools across the federation to set up this investment club. This is to ensure that the younger generation learn early the habits of better managing their finances, which invariably will help guarantee parents that their wealth will be well managed in their absence. To further promote financial inclusion, we have enlightenment campaigns around marketplaces and associations of artisans.

What do you think is responsible for the impressive financial performance of most of the companies amid challenging environments. Are the results real?
The impressive financial performances so far released by some firms howbeit their interim results could be attributed to more companies better managing their overheads. So many companies are increasingly adopting a hybrid work model or completely going remote, thereby cutting a massive cost on energy, office maintenance etc. Some other companies are posting extraordinary incomes resulting from valuation of their FX investments, due to the devaluation of the Naira. In some other cases, a lot of domestic companies have enjoyed increased patronage due to the FX scarcity and ballooning exchange rate, which has made importation of goods and services more expensive. So, consumers have turned to more local options of similar goods and services, which they hitherto may have had to patronize those from abroad. This particularly is the case with some listed companies in the agricultural, pharmaceutical, telecommunication, construction, and financial sectors of the economy.

What will be your projection for the market at the end of 2024?
Year to date, the Nigerian Stock market has broken several barriers in terms of the NGX All Share Index (NGX ASI) hitting new milestones and currently standing above the 100,000 psychological mark for the first time in its history. This has seen the Nigeria Stock market as the best performing market in the world, followed by Argentina. I believe this trend will continue due to a couple of factors such as the activities in the money market, that is declining rates, investors who are rate-sensitive and have some level of risk appetite, would opt for the stock market as an alternative. Should the inflation figures keep trending upwards, the natural instinct for investors would be to try to hedge against it and the stock market presents a good opportunity to achieve that. Also, at some point in the year, all things being equal, there most likely would be an inflow of foreign portfolio investors into our market, especially with a stability in our FX regime. This will help drive demand for stocks and subsequently another round of bullish momentum. Overall, the year is expected to see the market offer returns above those of any fixed income instruments, but investors must also act with a cautious sentiment. Clear investment objectives must be set, with respect to entry and exit plans. Greed must be avoided in this market at all cost.

Source: THISDAY

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Key Highlights of 2023

Despite facing adversities, the equity market showcased a remarkable 45.89% growth in 2023 compared to 19.98% growth recorded in 2022. This was driven by strategic government policies and resilient quarterly performances by companies. Positive investor sentiments trailed President Bola Ahmed Tinubu’s reforms, steering the market’s upward trajectory.

The performance of the market was largely driven by the oil/gas and the banking industry, both of which printed over 100% in returns and interestingly were sectors of major reforms in the review year. The banking and oil/gas indexes gained 114.9% and 125.54% respectively in the review year. It is also worth noting that all the sub-indices of the market aside from the AseM and Sovereign Bond recorded positive returns in 2023.

Insights from Industry Expert

Capital market operators and Chief Research Officers highlight the positive impact of government policies, the impressive performance of quoted companies, and increased market activities as key contributors to the market’s resilience

Challenges Faced

Monetary policy and exchange rate challenges, along with the delisting of major players, presented hurdles that the market courageously overcame.

2024 Projections

With an expected sustained growth profile, industry experts anticipate new listings and increased primary issues, particularly in the financial services sector.

Positioning for 2024: Unlocking Growth Opportunities

Nigeria’s stock market, soaring by 36.61% YTD, stands as the world’s best in 2024. Seize the chance to position yourself strategically for the impending market recapitalization.

Reasons to Invest

• Diverse Gains: From banking to consumer goods, sectors are flourishing, building on the 45.90% return in 2023.
• Expert Insights: Analysts project sustained growth in telecoms, banking, consumer goods, industrials, and oil and gas. Embrace fundamentally sound, dividend-paying stocks.
• Strategic Catalysts: Key factors like Dangote Refinery, Banking Recapitalization, and Corporate Actions offer opportunities for savvy investors.
• FPI Potential: Anticipate the return of foreign portfolio investments in 2024, capitalising on entry opportunities amidst potential market tightening.

Embrace the Future

Whether you are a seasoned investor, a returning participant, or a first-time investor, the Nigerian equities market invites you to embark on a journey of growth and prosperity in 2024.

Get in touch.

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One of the major attractions for investments in any country is the stability of its forex market. In this interview, the Business Head, Asset Management at Norrenberger Financial Group, Pabina Yinkere highlights why the Central Bank of Nigeria should intensify efforts to clear backlog of forex and ensure liquidity in the market.

With the forex unification and instability in the market, do you see it affecting investment opportunities in Nigeria?

For many years, the market has been calling for a reform of Nigeria’s Forex market that will engender liquidity and price discovery. A liquid and transparent Forex market is a key requirement for capital formation and economic growth in every economy. Sadly, in the last couple of years, Nigeria faced a major Forex crisis which stifled economic growth and dented investor confidence. On 8 June 2023, the CBN announced the collapsing of all Forex windows into NAFEM (previously NAFEX) with a removal of the hard peg on Naira trading within the official market, which led to a 40% weakening of the currency.

The development was initially cheered by markets as it underpinned strong investor expectations and led to the bull run in the Stock Market. However, the subsequent reality of low liquidity in the Forex market ignited a subsequent round of depreciation, extended the gap between the parallel and official rates and dented investor optimism. As long as this Forex uncertainty and overhang of unmet backlogs remain, investors will remain cautious about investing in Nigeria. While recent moves by the CBN to clear backlogs are welcome, we believe investors would like to see an improved level of Forex liquidity and positive market signalling to fully accept Nigeria as the alluring investment destination it once was.

How would you assess investment opportunities in Nigeria?

Nigeria remains a potential investment haven. The strong, youthful population and the diversified nature of our economy with various untapped natural resources make Nigeria an attractive economy cum investment opportunity. Many sectors within the country are in their infancy, suggesting that there is room for much growth. Nigeria’s per capita consumption of so many items underscores the huge investment potential there is. The Nigerian capital market is positioned to support this growth, but some hurdles need to be cleared to unlock this alluring potential.

How would you access the performance of Norrenberger financial group in the year 2023?

2023 was a defining year for Norrenberger. In March, the Group announced the acquisition of a 60% stake in The Infrastructure Bank (TIB) to drive our development objectives. In September, we received the prestigious certification as a Great Place To Work (GPTW), validating the tenets of our core values, FIRST which are friendliness, innovation, responsiveness, simplicity and trust – values which are deeply embedded in the Norrenberger culture. In November, we successfully launched the Norrenberger Turbo Fund (NTF) – a fixed income fund to provide subscribers with competitive returns in the fixed income market. In December, to commemorate our 5th Anniversary, we launched the Norrenberger Entrepreneurship Fund (NEF) to empower aspiring young entrepreneurs, targeting youth corpers. During the year, we recorded impressive strides with the Norrenberger Dollar Fund (NDF) and the Norrenberger Islamic Fund (NIF) which were both among the fastest-growing mutual funds in the market. In terms of performance, our mutual funds ranked within the top quartile as some of the highest yielding in their respective categories. In all, we strengthened our position in the industry as a top 15 Mutual Fund Manager and our overall Assets Under Management (AUM) rose by 60% in 2023. This is a testament to our clients’ faith, trust and acceptance of the Norrenberger brand.

With strong competitors in the market, what have you done differently to cement your place in the financial space?

At Norrenberger, we have deliberately created investment options across various asset classes to ensure that we give our clients the best options to diversify their investments – whether we are talking about low-risk money market exposures, higher yielding fixed income investments, investment in stocks, alternative asset exposure or hedging against currency risk and inflation with foreign currency denominated investment options. We can create a portfolio that suits you with our array of competitive-yielding investment products.

How do you think Nigeria can boost the investment landscape and attract both domestic and foreign investments?

I believe the very first focus should be on establishing macroeconomic stability. The government needs to set a vision of the destination where it wants to take Nigeria, sell this vision to its citizenry, and communicate the short, medium and long-term imperatives to arriving at this destination. The high inflation and currency challenges must be addressed to stir investor confidence.

We need to see policy effectiveness and consistency, efficient allocation of capital across public and private sectors, well-enshrined governance at all levels, security of lives and property and development of human capital. Also, it doesn’t have to be perfect. Once we start ticking some of these boxes, you are bound to open up the economy and attract investments.

Norrenberger has a goal to create financial solutions for every household by 2025. How do you intend to achieve that?

Norrenberger has strategically diversified service offerings across various segments of the financial market and will continue to do so. Today, Norrenberger is an integrated financial services group that provides bespoke financial solutions that add value to our clients. With a team of experienced professionals, Norrenberger offers a comprehensive range of services, including asset management, private equity, development finance, investment banking, securities trading, pensions, insurance, fintech and digital banking. We are listening to our clients. What are their aspirations? What are their dreams? What are their needs? We use this to understand the Nigerian psyche when it comes to their financial needs. On the back of this, we then activate our ‘think tank’ to come up with solutions to meet these needs.

Source: Improved forex liquidity will guarantee investments – Yinkere – Daily Trust

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What is Inflation? 

Inflation, in simple terms, is the sustained increase in the general price level of goods and services in an economy over time. When inflation occurs, each unit of currency you hold buys you fewer goods or services than it did before. In essence, your money loses value. It directly impacts your purchasing power and, consequently, your standard of living. 

How does it affect you? 

Think about it this way: If the price of bread is N700 today and the inflation rate is at 10%, the price of bread will be N770 next year. While a 70-naira increase may not seem like much, imagine the cumulative effect on all your expenses over time. If your income remains stagnant, you’ll find it harder to afford the same things you could before. 

Inflation also impacts your savings. Money that’s sitting idle, for instance, in your bank account, loses value over time due to inflation. So, if you have ₦1,000,000 in a savings account earning little to no interest, and the inflation rate is 2%, your money effectively loses ₦20,000 in purchasing power over the year.  

Consider the rising inflation rates in Nigeria over the last few years. Nigeria currently records a 25.80% inflation rate, the highest since 2009. The rising cost of living means that families need to allocate a larger portion of their income to cover basic necessities like food, housing, and transportation. This can put pressure on household budgets and make it challenging for individuals to save or invest for their future. 

How to react to inflation 

1. Remain Calm: It’s essential to stay calm during times of inflation. Making decisions from a place of peace can lead to better financial choices. In the bid to safeguard your money, do not risk your capital. Capital preservation is also important.
2. Budget and Save: Keep a close eye on your expenses and budget accordingly. Focus on saving and investing rather than letting your money sit in low-yield savings accounts. Also, examine your expenses closely and identify areas where you can cut unnecessary spending to better manage your finances. 
3. Consider Dollar-Denominated Investments: Explore investments in assets denominated in foreign currencies, such as the US Dollar. These can provide a hedge against the devaluation of the Naira and potentially offer better returns. At Norrenberger, we have dollar-denominated products to help you do just that like the Norrenberger Dollar Fund. 
4. Stay Informed: Monitor economic news and inflation reports. Being aware of inflation trends can help you make informed financial decisions. 

Inflation is a reality that affects us all, and its consequences can be particularly pronounced in countries like Nigeria, where inflationary pressures have driven up prices. However, with careful planning and the right financial strategies, you can protect your money and even come out ahead during times of inflation. Don’t let inflation erode your savings; take control of your financial future by investing wisely and staying informed. In the battle against inflation, knowledge truly is power. 

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Step 1: Start Early and Set Clear Goals 

The journey to a comfortable retirement begins with setting clear financial goals. Determine the lifestyle you envision during your retirement years. Consider factors such as housing, healthcare, travel, and leisure activities. Starting early allows you to take advantage of the power of compound interest, where your money earns interest upon interest, resulting in exponential growth over time. 

Step 2: Embrace Pension Planning 

In Nigeria, the Pension Reform Act of 2004 established a mandatory contributory pension scheme for both public and private sector employees. This scheme ensures that workers set aside a portion of their income towards their pension fund. Employers are also required to contribute to these funds, making it a collaborative effort. As an employee, it’s essential to understand your pension scheme, regularly contribute to it, and keep track of your account statements. 

Step 3: Choose the Right Pension Fund Administrator (PFA) 

Selecting the right Pension Fund Administrator is a critical decision. PFAs manage your pension contributions and invest the funds on your behalf. Research and compare different PFAs to find one with a strong track record of effective fund management, transparency, and customer service. Your choice of PFA can significantly impact the growth of your pension savings over the years.  

Step 4: Diversify Your Investments 

Diversification is key to managing risk and optimizing returns. While your pension fund is invested by your chosen PFA, you can often select different investment options based on your risk tolerance and retirement goals. These options may include equity funds, bond funds, and money market funds. Diversifying your investments helps ensure that your retirement savings are resilient to market fluctuations. 

Step 5: Stay Informed and Adjust Your Strategy 

As you progress in your career and life, your retirement goals and financial situation may evolve. Regularly review your pension contributions and investment strategy. If you experience significant life changes such as marriage, having children, or changing jobs, adjust your pension planning accordingly. 

Retiring comfortably requires intentional planning and disciplined financial management. The saying “time is money” reminds us that the time we invest today shapes our financial future. In Nigeria, the pension system provides a structured and regulated framework to help you build a secure retirement. By starting early, understanding your pension scheme, making informed investment choices, and staying vigilant, you can pave the way for a retirement that offers the comfort, freedom, and peace of mind you deserve. Remember, your financial well-being in retirement is a reflection of the time and effort you invest today. The best time to start saving for retirement was years ago, the second-best time is now. 

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