H2’23: Comercio Partners Urges Investors to Focus on Sectors Driving Economy

Oluchi Chibuzor

Investment banking firm, Comercio Partners has urged investors to adopt cautious approach and focus on sectors that drive the economy in the second half of the year. 

Co-Managing Partner, Comercio Partners, Steve Osho gave the advice in a report on the review of the economy in H1’23 and outlook for H2’23.

Citing notable developments in the H1’23 including the naira redesign policy, the general election and reforms announced by the new government, Osho observed that, “The first half of this year has been an exhilarating ride, featuring a blend of bullish and bearish sentiments in   the fixed income markets

“The Nigerian stock market, displaying its resilience, weathered macro economic challenges and election anxieties, soaring to its highest index point in 16years at 66,381.20, making the NGX the best performing in Sub-Saharan Africa

“In the same vein, the beginning of the exchange rate reform which saw the acting CBN governor announcing the commencement of a much more flexible exchange rate policy and unification of the currency has seen better harmonization between the I&E official window and the parallel market trading within a very close gap of circa $/760-770.”

Projecting on the direction of the economy in H2’23, Osho stressed that the trajectory of the economy in H2 ’23 will greatly hinge on the ministerial appointment by President Bola Ahmed Tinubu, as well as forthcoming monetary and fiscal policies.

He noted that, “The sustainability of the fuel subsidy removal and the liberalization of the foreign exchange market will play pivotal roles in the second half of the year. Alongside this, the revision of the minimum wage from N30,000 to N200,000 to enable Nigerians bear the brunt of the economic reforms emerges as a topic of interest.”

Osho, however, expressed optimism on the continued positive performance of the financial markets in H2’23, with increased participation from foreign portfolio investors. 

He said: “For the fixed income markets, we expect bullish sentiments in the near term, due to the buoyant system liquidity. However, as the year progresses, cautionary sentiments may arise, as investors keenly observe foreign portfolio investors participation,with yields expected totrend upwards to attract Foreign Portfolio Investments(FPIs).  

“For         the local stock market, we envision a continued upward trajectory in the benchmark All-Share Index, driven by investor anticipation of impressive financial performance from banks following the unification of foreign exchange rates.”