A financial services group, Norrenberger Financial Group, has released its economic outlook report for Nigeria in 2021. It provided detailed analysis of the Nigerian economy in 2020 also.
In its report, Norrenberger also analysed the current economic trends and projections for economic performance in 2021 across global financial markets.
According to firm, the report, titled: “Seizing the New Reality,” was designed for local and foreign investors who seek to understand the investment/capital market in Nigeria.
Speaking on the report, the Group Managing Director, Norrenberger, Anthony Edeh, said: “We are proud of the in-depth analysis and extensive work of our research team on this report. It is a valuable document that will act as a compass for the local and foreign investor navigating the Nigerian market in 2021.”
For instance, in the report, the Norrenberger analysts posited that the activities of the bears would outweigh the positives in the equities in 2021 based “on the limited upsides of stocks given the overbought status, mid-term uncertainties, the weak macroeconomic backdrop and thin foreign investors’ participation.”
Looking at the fixed income market this year, Norrenberger said amid unclear direction of yields in 2021, their outlook is largely influenced by the drivers of market liquidity.
“With the announcement of the Federal Government’s N5.06 trillion deficit in the 2021 budget, and the activities of corporate borrowers, we expect minimal impact on fixed income rates. We also project corporate issues between N2 trillion and N3 trillion, for a meaningful impact on yields. In our opinion, rates would remain low over the short term while pressures build-up for an upward movement in yield over the medium term,” they said.
According to them, while major policies and actions from government authorities and international organisations should be enough to restore economies to the growth path, aggregate consumption is expected to grow at a gradual pace.
“Equities market is likely to remain favoured. The Nigerian equities market in 2021 will be shaped by system liquidity, corporate earnings, attractive corporate dividends, foreign exchange and foreign portfolio investors. The fixed income market may likely return to higher yields on the back of overbought in the equities securities market, local borrowings, and monetary policies,” they said.