An investment banking firm, Comercio Partners, has admonished investors on the proper timing for entering and exiting financial markets.
It also said there was a need for intending investors to assess the investment opportunities in the market and develop plans to navigate the risks especially in 2023.
The Co-Managing Partner and Executive Director in charge of the firm’s Advisory, Mr. Steve Osho, made this admonition in a note to investors, tagged, “Investment Opportunities and Risks in 2023.”
Osho added that Comercio Partners has a variety of offerings designed to help investors take advantage of opportunities in the various financial markets through its expertise.
He said, “Appropriate timing of market entry and exit will be a highly needed skill to navigate the expected challenges in 2023. We recommend taking long positions in Eurobonds ahead of the expected slight decline in yields.
“In addition, holding long positions in dollar-denominated assets will be ideal as high-interest rates in the US drive up the value of the dollar relative to other currencies.
He recommended the same approach for local bond holdings before the expected decline in yields set in while advising investors to adopt a cautious approach with respect to the equity market.
Osho stated, “In the equities space, the general expectation is in favour of a negative performance by most equity markets as interest rates remain high and the possibility of economic recession increases.
“As such, investors need to cherry-pick strong names that are recession-proof and take advantage of one-off event-driven rides in the equity space.”
He was further quoted as saying “Very soon, we will launch our maiden fund, the Comercio Partners Fixed Income Fund, which is designed for the retail investment market to take advantage of our active portfolio market expertise in the Nigerian fixed income space.
“In addition, our Comercio Partners Naira and Dollar Offerings are products investors can take advantage of to exploit the opportunities in the local and international markets.
“Our strategy is to continue to innovate and make available products for the market to take advantage of various opportunities.”
While referencing major developments in 2022, Osho was quoted as saying, “2022 was pretty much a challenging year in all respects”, citing Russia-Ukraine war-induced high energy prices, exacerbation of supply chain disruptions, and interest rate hikes by central banks.
In 2023, Osho projected “The key factor to watch out for in 2023 will most likely be tightening monetary policies from central bankers.
“Major risks we see in 2023 relate to volatility, especially in the fixed-income market.
“While fixed income yields are expected to be slightly lower relative to the average levels seen in 2022 (driven by stability in central banks’ policy rates and a decline in some cases), the possibility of higher volatility in yields could result from unpredictable escalations in the Russia-Ukraine tension or the failure of the price caps implemented on Russian oil prices.”