Investments with exciting opportunities for good returns abound in listed equities with strong fundamentals and low valuations and other growth sectors of the economy. Some of them are real estate, education, health and agricultural sectors.
There are also investment opportunities in companies that are non-import dependent as Nigeria grapples with foreign exchange constraints.
These were part of the conclusions of investment and financial experts, who spoke at a seminar on ‘Investing in 2016, riding the storm, unearthing the opportunities’, organised by Diamond Bank in Lagos. The seminar was attended by top investors, industry captains, monetarists, financial analysts, entrepreneurs and policymakers among others.
The chief speaker, Bode Agusto, founder of Agusto & Co and former Director-General, Budget Office of the Federation. The discussion panelists, led by Aishah Ahmad, Head of Consumer Banking, Diamond Bank Plc, agreed that there were exciting investment opportunities in the real estate, education, health and agricultural sectors of the economy.
They also noted the huge investment opportunities in companies that are non-import dependent, critical sectors of the economy like electricity energy and Nigerian sovereign bonds especially as the borrowing level of the government to fund the budget is expected to rise.
Agusto identified investment opportunities as listed equities with strong fundamentals and competitive valuations, private equity investments in education and healthcare and real estate.
He said some people, who used to go abroad for routine medical care and secondary education, will look to local persons that can provide equally good service at competitive prices.
Agusto pointed out that the key prices in every economy include interest rates, inflation rates, exchange rates and identified a fourth key price for Nigeria as the “the price of crude oil.”
He further explained that the fundamentals that drive exchange rates are – the net flow from trade activities, net capital flows and the extent to which external reserves can act as a buffer and ability of a country to borrow to fund USD spending.
“Currently, net flow from trade is negative, so is net capital flow; reserves are low and ability to borrow USD is somewhat constrained,” Agusto said.ALSO READ – Analysts Says Its Time To Invest In Nigerian Real Estate
He said it would be difficult to maintain current official exchange, saying that government will try to maintain the current official rate for as long as possible, but may allow private sector suppliers of foreign exchange to do business at a different rate.
He, however, acknowledged that if we free the markets, the macro-economic fundamentals can support an exchange rate much lower than the current rates prevailing in the parallel market.
Other discussants included the fixed income analyst, Diamond Bank, Emeka Uzomba; real estate specialists, Paul Onwuanibe, and equity market analyst, Titi Odunfa-Adeoye, who stated that opportunities in the equities market should be treaded cautiously.
They recommended that investors adhere to the global portfolio analysis offered by Diamond Bank’s ‘Diamond Privilege’ account, which enabled clients review their investment portfolios from a risk and return perspective to ensure that they were generating the highest yields possible.