L-R: Head, Research and Strategy, Jolomi Odonghanro; Associate, Research and Strategy, Opeoluwa Oluwa; Managing Director, Christian Orajekwe, and Associate, Research and Strategy, Abulazeez Kuranga; all of Cordros Securities at the company’s Full Year 2023 Outlook, tagged ‘Charting Through a Pervasive Slowdown’, held recently in Lagos.

 

 

Experts in the nation’s financial sector have raised concerns on the possibility of inflationary pressures and asset volatility on the local economy, as the nation’s commences economic activities in the new financial year.

 

The experts, who also projected a positive outlook for the nation’s equity market in  the new year, made these disclosures at the FY 2023  Outlook, organized by Cordros Asset Management Limited, in Lagos, recently.

 

They expressed the hope that the performance of the nation’s equities market will be positive in the H1-23, an optimism hinged on investors’ positioning for 2023 FY results  ahead of positive corporate  earnings, and re-investment of dividends amid higher yields in the fixed income market.

 

The company’s  Head, Research & Strategy, Jolomi Odonghanro, in his presentation tagged: ‘FY2023 Outlook: Chart Through a Pervasive Slowdown’, argued that the nation’s currency, the naira, would continue to be under pressure, against the dollar given the limited FX supply at the official windows amid increased FX demand.

 

He identified the recent hike in PMS prices to N250 per litre; currency depreciation to N455/USD at the official market; the 10.5% electricity tariff hike 18.56%y/y (2023 FY average 18.01%y/y (December 2023), as factors likely to cause headline inflation in the new financial year.

 

Jolomi argued that the Russia – Ukraine crisis, Covid-19 restrictions in China and general global economic conditions, succeeded in hampering growth recorded in the economy, through the crude oil prices, which reached a 14-year high of USD 127.98 per barrel, in the out-gone year.

 

The company’s Associate, Research and Strategy, Mr. Opeoluwa Oluwa, described the FI market as largely  volatile in the out-gone year, given the Hawkish strategy adopted by the monetary policy authority.

 

“For 2023, the fixed income market is expected to remain volatile in 2023 FY. We expect the direction of market activities will be swayed by global monetary policy and external debt markets; demand and supply dynamics; domestic monetary policy expectations; electioneering  process, and fiscal authorities management post election.

 

“Overall, we estimate that the average yields on Treasury bills and bonds will increase in the year  and settle at c.10.8% and c.15.5% by the end of 2023FY,” he stated.