Meristem Securities, a capital market conglomerate has continued to offer professional guidance to investors seeking opportunities amidst the global economic uncertainty and the COVID-19 pandemic.
The organization is giving insights in a bid to support investors who are willing to preserve their assets and manage their portfolio exposures, as economic shocks ravage the investment climate.
The COVID-19 pandemic has caused slowdown in economic activities as a result of strict guidelines of social distancing and in some cases partial and complete lockdown of some states in the federation. These guidelines have further compounded preexisting growth challenges in the domestic front like the crash in oil prices, which contributes a significant amount to government revenues and the nation’s foreign exchange reserves. Despite this challenge, the organization affirms that pockets of strategic opportunities still exist for investors who are looking to invest in the Nigerian capital market and economy.
With the recent announcement by the International Monetary Fund, that the global economy is in a recession which is at least of the magnitude as the 2009 economic crisis, with a predicted recovery in 2021, Sulaiman Adedokun, managing director of Meristem Wealth Management, while speaking with our reporters stated that “Since the official exit of Nigeria from a recession in Q2:2017, the Nigerian economy has consistently recorded slow growth (under 3 percent) in real Gross Domestic Product (GDP), much below the pre-recession levels of 3-5 percent.
Although non-oil sectors such as telecommunications, agriculture and manufacturing have supported real GDP growth, the oil sector continues to be a key determinant of the overall growth of the economy. Thus, the crash in oil prices from an average USD67.31 per barrel in December 2019 to USD32.98 per barrel in March 2020 is expected to have far-reaching consequences for economic growth given the contribution of the oil sector to government revenues and foreign exchange reserves.” Commenting across the various sector of the economy “The banking sector is more resilient than previous years, the consumer goods industry is going to be guided by demand for essential items during this time, the recapitalization of the insurance industry is expected to continue amid the current crisis and we see growth in the telecommunications sector due to demand for voice and data services as most businesses now work remotely” He concluded.
Damilola Hassan, head Wealth Management at Meristem stated that “The overall outlook for the financial market though clouded with uncertainties at this moment, we are of the opinion that fixed income securities will provide safer investment opportunities for investors given the volatility that exists in the equities space and the accompanying risk of capital loss associated with such investments, but there are certain equity products that can help to diversify and broaden your portfolio exposure like the recently launched Meristem Value and Growth Exchange Traded Fund.. Coupled with the aforementioned, we expect the downward review of Nigeria’s sovereign rating outlook by global rating agencies and the elevated risk environment to lead to an upward repricing of yields in the fixed income space. We also recommend investments in dollar-denominated fixed income instruments as a means of hedging against foreign exchange risks” Damilola added.
Meristem offers a wide a range of products that cater to all classes of investors regardless of the stage in their financial journey, products like the Meristem Diaspora Trust, Fixed Term Investment Portfolio Tip (Fx-Tip), Real Estate Advantage Portfolio (REAP), Meristem Ethical Earnings Portfolio (MEEP) and a host of other money market and equity market fund, offer varying options to interested investors. The recently launched Meristem Exchange Traded Funds offer hassle-free and cost-effective investment option to investors and with a minimum of N10,000, Investors can have access to a wide range of stocks across different sectors including banking, industrial goods, conglomerate, agricultural sectors and a host of others that meet their investment style criteria. The Exchange traded fund typically mirrors the performance of the index it tracks.
Meristem for the past 16 years has been consistent in value creation and innovation within the capital market space. In 2018, the Nigerian stock exchange awarded Meristem as the best digital broker of the year. In 2018 also, Meristem became the first Nigerian asset management firm to attain compliance with the Global Investment Performance Standards (GIPS) by the CFA Institute. Still in 2018, Meristem received two nominations from Business Day, for the best Money market Fund and Equity Fund. In 2017, Meristem handled the single largest trade in the history of the Nigerian Stock Exchange.
The firm has remained a leading player in Nigeria’s competitive investment market with a solid reputation as a highly professional and client-centric firm.
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