Nigeria Strategy Report H1 2019 Excerpts- Global Growth: New Year, Same Rhetoric, Matching Growth
- Over the next few days, we will feature excerpts from our core strategy document – The Nigeria Strategy Report. The report communicates our understanding on key happenings in global and domestic financial markets over 2018 and provides our insight on what we believe will be the major themes underpinning investor sentiment over 2019. We begin the series with a look at the major themes that dominated the global economic and financial landscape in 2018 as well as our outlook for 2019.
- Although the global macroeconomic clime has been hitting patches of turbulence over the past few months, the devastation appears largely one sided. Economic growth in Developed markets (DMs) weakened slightly on concerns about sluggish growth in personal consumption expenditure—fallout of trade rhetoric and currency induced contraction in external demand mainly from the Eurozone, UK and Japan. For Emerging markets (EMs), growth momentum strengthened underpinned by the knock-on effect of higher commodity prices and stronger private capital investment. Consequently, global GDP is projected to have printed at 3.7% over 2018 same with 2017 growth with support coming from strong growth at the start of the year. Particularly, growth in DMs is estimated to have decelerated by 10bps to 2.3% (2.4% in FY 17) while growth in EMs is estimated at 5.0% from 4.9% in FY 17.
- Over 2019, reflecting the fading impact of accommodative monetary policy in DMs and recovery in commodity prices which supported far more stronger growths in EMs, global growth is now projected to remain at 3.7%. Akin to 2018, we believe the impact of additional rates hike in US, the reduction in the assets purchase program by the ECB amidst uncertainties emanating from the UK divorce from the EU will limit the scope of growth in DMs over 2019 (IMF 2019F: -30bps YoY to 2.1%). Whereas in EMs, though the ongoing trade spat between US and China could be a snag to EM growth, expected recoveries in Latin America, Sub-Saharan and Saudi Arabia is expected to leave growth in EMs unchanged at 4.7.
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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