Nigeria Strategy Report H2:2022 - HIKES & ARMS
The unrest in Eastern Europe has had devastating consequences across the world. It compounded existing global supply chain issues and caused skyrocketing commodity prices. As pessimism for growth slowly overtook initial optimism, monetary authorities and policy makers became confronted with the infamous policy dilemma of reigning in inflation versus promoting economic growth to avert a recession. So far, monetary policy makers have mostly preferred to fight inflation via monetary tightening at the expense of growth, but it is uncertain how far this policy direction can be sustained.
The global capital market has largely reflected the prevailing mood of the underlying macroeconomic conditions and expectation of policy actions. While the Equities and Fixed Income markets reported underwhelming record performances, the commodities market outperformed during the period due mainly to supply chain disruptions. We observed that the performances of the equities and fixed income markets were occasioned by the huge downward repricing of financial assets, amid the expectation of rate hikes. A precursor to the selloffs that marred the market in the period.
Unlike it is in most markets across the world, in H1:2022, the Nigerian domestic financial market recorded decent performances in the period. The equities market coasted to a 21.31% return in H1:2022. In addition, the fixed income market also closed the period, although marginally, in the positive territory. This report details our thoughts on ‘Hikes & Arms’, and their implications for economies and markets.
Find attached, the full report.
The ARM Research Team.
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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