Monthly Equities Market Report - May 2023
Global Market Overview
In the month of May, the global markets experienced a blend of responses. The atmosphere was charged with volatility as a myriad of concerns surfaced, including apprehensions over macroeconomic growth, debates surrounding the debt ceiling in the United States, the enduring banking crisis, and the prolonged tightening of monetary policies pursued by prominent central banks in response to persistent inflationary pressures. During the month, the US Federal Reserve, European Central Bank (ECB), and Bank of England (BoE) collectively implemented a 25bps point increase in their respective benchmark interest rates, resulting in rates of 5.00%-5.25%, 4.25%, and 3.75%-4.00%. Although the US Fed indicated a potential halt to its hawkish stance, the BoE and ECB conveyed their intentions for additional rate hikes during their upcoming monetary policy meetings.
Domestic Market: Market Reacts
In slight contrast to our April 2023 monthly forecast, the Nigerian equities market upheld its upward trajectory, securing a remarkable sixth (6th) consecutive month of positive gains. Consequently, the year-to-date returns escalated to an impressive 8.82%, surging from a modest 2.25% in April 2023. This exceptional performance can be primarily attributed to the optimistic pronouncements made by the president, underscoring the forthcoming implementation of market-friendly policies on the auspicious day of inauguration. Notably, this transformative sentiment translated into a substantial surge of 5.22% on May 30th, 2023, marking the most substantial single-day trading gain since November 12th, 2020, when it recorded an impressive ascent of 6.23%.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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