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Experts task investors on proactive approach to pandemic

By Clarkson Voke Eberu
30 March 2020   |   4:11 am
As the COVID-19 challenge shakes the globe to its very foundation, investors in the Nigerian capital market have been enjoined to adopt proactive measures...

The unexpected emergence and spread of the novel Corona virus has generated stress in capital markets, triggering a downward trend in stocks and other investments. As a result of this development, Investment One Financial Services Limited recently held a seminar titled Outlook for Q2 and Beyond to sensitize the public on the realities of the effects of the Covid-19 global pandemic on investments and the local and global economy.

According to Mr Moses Ahmed, research analyst with the company, investors were advised to adapt a proactive approach to the realities of the times while taking advantage of the opportunities in the face of present crisis. Predicting an imminent drop in global demand for oil and attendant effect on production, Ahmed urged investors to focus on long-term investments as this will guarantee better returns.

Also speaking at the event, Mr Oluwapelumi Joseph, Group Head, Investor Relations and Research, Africa Practice, while tracing the history of the drop in oil sales back to the trade war between Russia and Saudi Arabia and the emergence of the Covid-19 pandemic predicted further increase in inflation due to demand factors. According to him, The financial and real economy risks are interrelated.

He further highlighted the timeline of the effects of the virus on the global financial market but stressed that the prevailing challenges presents huge opportunities for wise investments. He cited the agricultural and pharmaceutical industries as examples, saying it will be comparatively less vulnerable but will still face challenges as demand wavers.

The financial experts also predicted increased interest rate for Foreign Portfolio Investors (OMO stop rates); placing more items on banks from accessing the official FX market; the use of the nation’s reserves to defend up to another devaluation trigger point of US$30billion; and lastly devaluing the currency to bring confidence to the market.