Skip to main content

Ten Surprises of 2018

Dear Speculators,

Let's face it, 2017 was a bad year. The only things that went the right way in '17 were crude oil, equities and the decelerating pace of inflation. From fuel scarcity to periodic power outages, rising unemployment to terrorism perpetrated by herdsmen, Nigeria looked more or less worse of the same.

As usual, the new year has started with a lot of hope but the long queues at filling stations is enough to beat out the optimism out of most realists. To help in putting the most important things into perspectives so we do not dwell less on minor things rather than channelling all our attention to major possibilities this year, we have put together 10 of the biggest surprises this year you should pay attention to.

Ten Surprises of 2018
1. The stock market ASI crosses 65,000
2. Banks post record annual profits for 2017
3. 1-year TBills rates fall below 13%
4. Inflation falls below 12.5%
5. Nigeria's economy expands by more than 4%
6. Crude oil price exceeds $90
7. Pres. Buhari announces re-election bid to complete the Change Agenda and polls show he could actually win
8. CBN drops interest rate and devalues the Naira 
9. External reserves exceed $50bn
10. Petrol pump price jumps to N180

Some of the above predictions might seem crazy, some may be expected but these are our biggest ideas of 2018. While we hope some of the forecast do not come to fruition, it will be obscene to pretend like it is not a real possibility.

 Emeka Ucheaga
Managing Partner,
Emeka Ucheaga Advisory

Comments

Post a Comment

Popular posts from this blog

The Wrong Forecaster

Dear Speculators, The gloominess of the Nigerian economic outlook has significantly knocked down the prices of some financial assets but the real value of some of these assets have been mildly affected. While recounting the economic misfortune that has befallen the country in the last two years is inevitable, dwelling on the past is a perfect time wasting activity. Luckily, investment is forward looking and not regressive thinking. The past is a great indication of the future but not a mirror for prediction. The randomness of the world ensures that yesterday looks at least slightly different from tomorrow. And if we have learnt anything from the history books, it is that good things do not last forever and bad times always have an end. Life is by definition cyclical. The key questions to ask before buying or selling any financial asset is; will the current economic situation last forever? Will the inflation rate remain in double digits over the next 5 years? Will the Nai...
Post a Comment
Read more

Everything is Going Down in Nigeria Except Inflation

Dear Speculators, The wait is over, we anticipated bad news and we got it. Our fears have become reality, the economy has continued to back slide and Nigeria has officially tipped into a recession. Not that this surprises anyone though. Falling oil prices, dollar scarcity, exploding oil pipelines, massive labour retrenchment and import restrictions have all contributed their fair share to weaken growth in Nigeria's economy. However, the stock market arguably has had it worse than the general economy this year as the market is currently down about 3.8 percent against an economy contraction of 2.06 percent in the second quarter. A closer analysis of the stock market brings to light some intriguing statistics. The largest 49 companies in the stock market account for 97% of the total stock market capitalization. 41 companies of the 49 sell at an average of 22x earnings. Only 49 companies out of a total of 171 companies trading on the Nigerian Stock Exchange are valued above ...
Post a Comment
Read more

It's a Dip not a Bear

Despite strong economic fundamentals and fairly optimistic market sentiments that have driven stock market prices in the past year and even stronger since the start of 2018, stock markets all around the world are witnessing an unexplained coordinated price descent in the past one week. Asides the biggest bitcoin price crash in years, now 66% lower than its record high price of $19,500 in December, nothing out of the ordinary has occurred. Yes, stock prices are at the highest it's been in since pre-crisis era in U.S and the market is due for a price correction but then how do we explain market dips in relatively cheap emerging markets? Something is amiss! As Central Bankers around the world have begun to discuss monetary tightening in a coordinated fashion as the quest for 2% inflation seems more achievable this year due to strong global economic and rising commodity prices, bond prices have dropped precipitously and the U.S 10 year Treasury bills risen above 2.5% a...
Post a Comment
Read more