Despite the inclement business environment and the wind of investment phobia that is blowing harshly over the economy following the slump in the price of crude oil and the value of the Naira, Diamond Bank has unearthed viable investment windows that would help restore investor confidence and shore up asset value and return.
These were made known recently in Lagos at the Bank’s Diamond Privilege seminar with the theme: ‘Investing in 2016, riding the storm, unearthing the opportunities’. The seminar was attended by top investors, industry captains, monetarists, financial analysts, entrepreneurs and policymakers.
Diamond Bank’s Chief Executive Officer, Uzoma Dozie, in his welcome address, noted that although the investment environment has remained volatile, there is hope as one of the Bank’s strategic focus is the commitment to help investors navigate to other sectors that would yield optimum return on investment.
According to him, Diamond Privilege, the Bank’s Wealth Management unit is fortified with knowledgeable, experienced and dedicated personnel that are ready to work with clients, guiding them appropriately to identify and leverage market opportunities.
“We are driven by the clear need to address issues around current market volatility while highlighting the tremendous opportunities that would deliver significant yields to the confident and discerning investors,” he said.
The chief speaker, Bode Agusto, founder of Agusto & Co. and former Director-General, Budget Office of the Federation and the discussion panelists, led by Aishah Ahmad, Head of Consumer Banking at the Bank, agreed that investment opportunities abound in real estate, education, health and agricultural sectors of the economy. They also pointed the huge investment opportunities in companies that are non-import dependent, critical sectors of the economy like electricity energy and FGN bonds especially as the borrowing level of the government to fund the budget is expected to rise.
In his keynote speech, Agusto noted that the key prices in every economy include interest rates, inflation rates, exchange rates and identified a fourth key price for Nigeria, the “the price of crude oil”
He further opined that the fundamentals that drive exchange rates are - the net flow from trade activities, net capital flows and the extent to which external reserves can act as a buffer and ability of a country to borrow to fund USD spending.
“Currently, net flow from trade is negative, so is net capital flow; reserves are low and ability to borrow USD is somewhat constrained,”
He believes that it is going to be very difficult to maintain current official exchange and predicted that government will try to maintain the current official rate for as long as possible but may allow private sector suppliers of FX to do business at a different rate. He however acknowledged that, if we freed the markets, the macroeconomic fundamentals can support an exchange rate much lower than the current rates prevailing in the parallel market.
Agusto identified investment opportunities as listed equities with strong fundamentals and competitive valuations, private equity investments in education and healthcare and real estate. He argued that some people who used to go abroad for routine medical care and secondary education will look to local persons that can provide equally good service at competitive prices.
Reiterating Agusto, other discussants which include Emeka Uzomba, fixed income analysts, Diamond Bank; Paul Onwuanibe, real estate specialists and Titi Odunfa-Adeoye, equity market analyst stated that opportunities in the equities market are areas that should be treaded cautiously. Strongly recommending that investors adhere to the Global Portfolio Analysis, offered by Diamond Privilege, which enables clients review their investment portfolios from a risk and return perspective to ensure that they were generating the highest yields possible.
Onwuanibe expressed optimism in the real estate sector, acknowledging that prices and costs may be at odds because of the slump in oil prices. He advised investors to focus on long-term yield as against large and unrealistic appetite for immediate returns.
In her closing remarks, Ahmad stated that the seminar aligns with the Bank’s strategic objective to incentivize customers and investors with comprehensive investment advice, especially as the bank has opted to exponentially grow its corporate market and maintain its strong foothold in the industry.