Nigerian investors seek out safe haven high returns - Analysts

As markets in Nigeria kick off the fourth quarter of the year, investors and portfolio managers are strategizing to maximize returns while navigating the volatile investment landscape. Dayo Obisan, Managing Director of Greenwich Asset Management, weighed in on the current market trends and provided insights into potential investment opportunities. With inflation soaring at 17.6%, investors are flocking to safe haven assets to secure positive real returns above the inflation rate. Treasury bills have emerged as a favorite among investors, offering competitive returns and stability amidst market uncertainties. The influx of funds into money market instruments and oversubscribed offers indicate a growing appetite for low-risk investments. However, concerns about market saturation and diminishing returns loom over the horizon. Despite the allure of safe havens, some daring investors continue to explore opportunities in equities markets. The banking sector, with attractive price-to-book value ratios, presents a compelling investment prospect. Tier one banks like Zenith Bank, Access Bank, and GTBank have shown resilience in a challenging economic climate, rewarding investors with significant returns. Manufacturing and infrastructure sectors also show promise, fueled by government projects and increasing demand. However, the industrial goods index has underperformed expectations, with factors like cost pressures and pricing dynamics hindering sector growth. Stock selection remains crucial for fund managers seeking to capitalize on market upswings and optimize portfolio performance. Obisan emphasized the importance of timely decision-making and monitoring key indicators to seize investment opportunities. While some investors have taken profits in banking stocks and shifted focus to secure assets like treasury bills, market dynamics and company performance will dictate future investment strategies. As the year-end approaches, a prudent approach to asset allocation and risk management will be essential for safeguarding investment portfolios and maximizing returns. The evolving market trends in Nigeria underscore the need for a balanced investment strategy that accounts for both the opportunities and risks in the dynamic financial landscape.