East Africa’s pioneering investment management firm ICEA LION Asset Management has presented its fourth quarter 2022 investor pulse today to highlight potential opportunities for investors in the prevailing adversity around the world.
The event themed ‘Grey skies, silver linings: Opportunity amidst volatility’ was held today at the Serena Hotel in Nairobi.
Speaking at the function, Senior Portfolio Manager at ICEA LION Asset Management, Richard Murithi highlighted how the Ukraine war has affected the world.
“The war in Ukraine may be long drawn out thereby extending the global uncertainty levels that have risen for most of this year,” said Murithi.
He revealed that price increase has hit multi-decade highs in the developed world and multi-year highs in sub Saharan Africa like the growth of oil consumption worldwide has strained the glow of oil refining capacity leading to upward pressure on fuel prices.
Murithi further noted that the Central Bank policy rates in developed markets are at multi-year highs and are expected to rise even further in the coming months.
“Interest rate hikes and the US Dollar strengthening have resulted in sharp losses for both fixed income and equity investors and the growing prospects for a US economic recession may further dampen investor sentiment towards risk assets,” added Murithi.
The Manager noted that opportunities were available for investors to generate strong returns against a backdrop of the volatility and interest rates on domestic treasuries that are at a six year high.
He further said that long term equity investors were supposed to know that the banking sector bears durable promise with some listed banks on track to double their profits in the next four years and for offshore investors, current yields on some Kenyan Eurobonds indicate that returns of 30 percent in US dollar terms could be achieved in two years.
Murithi pointed out the rising trends that may also contain opportunities for investors hence should not lose sight of potential opportunities arising from emerging global trends such as delocalization, decarburization, digitization, and decentralization.
By Theresia Kiio and Irene Mwende