How to navigate investment challenges in 2023 – Comercio Partners

Comercio Partners, an investment banking firm has advised investors to properly time their entry into and exit from financial markets in 2023.

This, the company said, will enable them to assess investment opportunities and navigate risks during the year.

“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. The same long position is recommended for local bond holdings before the expected decline in yields set in. With respect to equities, a cautious approach is recommended in all markets.”

Steve Osho, co-managing partner and executive director in charge of advisory at Comercio Partners, gave this advice in a note to investors, titled ‘Investment Opportunities and Risks in 2023’, adding that the company have a variety of offerings designed to help investors take advantage of its expertise in the various financial markets.

“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.”

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Reviewing major developments in 2022, Osho said: “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.

Making projections for 2023, Osho said, “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 relates 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.”

With respect to the equities market, Osho stated: “In the equities space, general expectation is in favour of a negative performance by most equity markets as interest rates remain high and the possibility of economic recessions 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.

For investors to access the opportunities, Osho 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.