Azubike Emodi is the Managing Director of Anchoria Asset Management. He has over 15 years’ experience in the financial service sector. Prior to his present role, he had worked as the Managing Director of VFD Microfinance Bank. In this interview, he speaks about investment opportunities in the Nigerian economy as well as the recent relaunch of his organization. Excerpts:
What is your assessment of the performance of the Nigerian economy so far in the first half of 2022?
Despite a moderate growth of 3.40 per cent in 2021, the economy continues to grapple with severe economic challenges in the current year some of which include the increasing inflationary pressure, the forex liquidity challenges and rising fiscal debt. Amidst these, the 2022 budget grew by 18.5 per cent to N17.3 trillion, committing another N7.3 trillion in deficit in the face of a rising debt profile and low revenue generating capacity.
Also, the myriad on new taxes introduced to broaden the country’s revenue base – like the N10/litre sugar tax on non-alcoholic drinks, and the six per cent tax on digital services, may further stifle output growth and contribute to the rising cost of doing business in the country. Furthermore, we saw stand-out policies like the Forex Repatriation Initiative, RT200, created to support forex supply and alleviate currency pressures. While some of these policies are commendable, I believe they are insufficient, considering our unsophisticated export basket and sustained underinvestment in the oil sector.
Looking at the Nigerian economy, what policies would you recommend to policy makers to stimulate growth?
I will recommend a policy that tackles the unreliable agricultural infrastructure across the states, as this will help achieve our long-standing objective of self-sufficiency and expand our export base. Next on my list is insecurity. This challenge threatens major business activities and investors’ confidence, a policy that addresses this will help contribute considerable growth. Also, I think a market-based and transparent forex policy is imperative to address the underlying issues behind the forex crisis and provide incentives for foreign direct investments into the economy. Lastly, I believe we need to prioritize development of our education and health sector for effective human capital development and growth, as the current negligence towards the sector is engendering economic prosperity for the future of Nigeria.
So, what is your assessment of the present investment climate and what form of advice will you give to someone looking for where to invest?
Investors can consider foreign currency denominated investments. These investments can be either mutual funds, equities or Eurobonds investments. Investors can earn returns in the form of interest payments, capital appreciation, or coupon on the bonds. We have also seen the Nigerian stock market return over 20 per cent so far, owing to improved domestic participation, impressive corporate earnings results, high dividend yields, unattractive fixed-income yields, as well as some other corporate actions. Year-to-year, few top performing stocks include GUINNESS (+123.33%), SEPLAT (+100.00%), AIRTELAFRI (+85.30%), PRESCO (+84.51%), and FIDSON (+76.85%). Additionally, investors can consider investments in commercial papers, such as treasury bills. They offer better yields when compared to treasury bills instrument and further reduces the impact of inflation on investment. For context, the yield on commercial papers averages about 12 per cent compared to the average yield on treasury bills of three per cent. Also, due to the expectation of higher yields in the fixed income space closely linked to the government’s high domestic borrowing plan and high inflationary pressures, the returns on fixed income mutual funds are expected to improve, providing investors with yet another good investment opportunity.
What informed the decision to relaunch Anchoria Asset Management few weeks ago?
Given our track record of success since inception, it became important for us to reinstate our experience in the industry, reintroduce our products and services and enlighten the public on our plans. We decided to re-announce our existence in the industry.
What are your expectations from the brand going forward?
For us at Anchoria Asset Management, the promise is simple; Excellence. Our different products have been created to suit the lifestyle of our clients at different stages of their lives. Whether Portfolio Management, Fixed Term Deposit, Eurobond Linked Notes, Treasury Bill Linked Notes, Fixed Income Investment, Mutual funds or investment advisory, there’s a product for everyone. We also recently launched our mobile app, SEEDs that helps our clients easily subscribe to any of our products and manage their investments on the go. This app is available to download on Play and App store.
What are those attributes or unique selling points that set Anchoria Asset Management apart from its peers in the market?
At Anchoria Asset Management, we deliver best-in-class innovative investment products that create, grow, and preserve wealth for our clients. We are particular about what our customers want and what products will be beneficial to them at every stage of their life.
Can you take us through some of your products?
Like I mentioned earlier, we have a product for everyone. Some of them are:
Portfolio Management: Our team of experienced wealth advisors can help clients invest their funds in various profitable investment instruments. They leverage their extensive understanding of the local and global markets, returns and risk appetite of the clients to make these decisions.
Mutual Funds: We have 3 products in this category. The Equity Funds, Fixed Income Funds & Money Market Funds. The risk on these funds ranges from low-moderate and you need just N5,000 to begin investing in any of these products. The mutual fund is a perfect option to start small and earn more on periodic savings.
Eurobond Linked Notes: This is a perfect option for investors who will like to diversify their investment in a dollar denominated fund. This fund invests in dollar denominated securities like Eurobonds and investment grade corporate bonds.
Fixed Term Deposit: This fund allows clients invest for a fixed period to earn interest of up to 13%. The tenure ranges from 30 -365days and it is also a low risk investment. For more information on our products, prospects can visit anchoriaam.com to learn more.
In the next three to five years, where do you think the company would be?
In 3-5years we intend to be the leading asset management company deploying innovative products, solutions and opportunities that result in sound rewarding investment decisions for our clients.
In terms of policy expectations, what types of favourable policies do you think your regulator(s) can introduce to support the sector?
As the year continues to unfold, prioritizing these policy mix in the medium term should bode well for the sector. Clearly, the long-term policy of a stable exchange rate with multiple windows has produced limited benefits and created uncertainties in the financial sector, hence a gradual approach to establishing a unified and clear exchange rate regime would moderate the premium demand in the parallel market and even help drive the stability of the sector.
