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The Fastest Growth in Decades: Investors Top-up Portfolios – but in What Stock?

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Egypt Stocks

The time is now for investors to top up their portfolios – in both value and growth stocks – ahead of a stronger than expected global economic rebound, says the CEO of one of the world’s largest independent financial advisory organisations.

The bold ‘call to action’ from Nigel Green, chief executive and founder of deVere Group, comes as U.S. stock futures for Tuesday are pointing higher after the Dow Jones rallied to an all-time intraday high on Monday, and as the tech-heavy Nasdaq steadied after a correction.

Meanwhile, Asia-Pacific markets had a mixed day of trading in Tuesday’s session and European markets are set to open broadly higher continuing a rally on Monday that saw Germany’s DAX climb 3.3% and hit a new intraday high.

Mr Green says: “This first half of 2021 is going to be a whole lot different for the markets, compared to 2020.

“This time last year, we were in the middle of a major and sudden global stock market crash due to the panic and uncertainty of the pandemic.

“Now, just 12 months later, due to the mass global vaccine rollouts, historic stimulus packages from governments – including the $1.9 trillion from the Biden administration for the world’s largest economy – easy money from central banks, and record levels of pent-up savings and demand, we’re looking at a major economic recovery.

“We can expect a stronger than had previously been expected global economic rebound this year, particularly in developed economies.  We could see the fastest growth in decades.

“This is evidenced by the Federal Reserve – the world’s de facto central bank – pulling its three lending schemes to finish as scheduled at the end of March due to a lack of usage.”

So, with a likely economic boom on its way, where should investors invest?

The deVere CEO observes: “Much is being made of the phenomenon of ‘rotation.’ This is where a move into those sectors could benefit from higher inflation and an improving economy, such as financial, industrial and energy stocks, and out of tech stocks, for example, that boomed during extended lockdowns.

“However, I would suggest that it should not be a case of ‘either/or,’ and that a savvy investor should incorporate both value and growth stocks into their portfolios.

“In a post-pandemic era, it’s likely we’ll maintain some lockdown habits, like working from home more often, but we’ll also be back in the gym; we’ll travel and go to public events again, but we’ll also be more conscious of the environment and hygiene procedures.

“In short, value stocks are in revival mode, but does anyone suddenly seriously think Amazon, Google and Tesla are not companies of the future also?”

“As ever, the investor’s best tool to mitigate risk and seize opportunities is proper diversification.”

Mr Green concludes: “2021’s markets are already very different.

“Investors will not want to miss out on the major economic rebound and should top-up their portfolios, and ensure they are diversified, sooner rather than later.”

Investment

SEC Warns Against Proliferation of Unregistered Investment Platforms

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The Securities and Exchange Commission (SEC) has warned the investing public to be wary of the proliferation of unregistered online investment and trading platforms facilitating access to trading in securities listed in foreign markets.

SEC’s warning was conveyed via a circular issued in Abuja, Thursday to capital market operators.

It advised the investing public to seek clarification as may be required via its established channels of communication on investment products.

The circular read: “The attention of the SEC has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on securities exchanges registered in other jurisdictions.

“These platforms also claim to be operating in partnership with capital market operators (CMOs) registered with the Commission.”

The Commission categorically stated that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.

Accordingly, the SEC notified CMOs who work in concert with the referenced online platforms of the Commission’s position and advised them to desist henceforth.

Public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.

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SoftBank Reaps $33 Billion Coupang Windfall

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SoftBank Group Corp on Thursday racked up a roughly $33 billion gain on paper through the public market debut of South Korea’s largest e-commerce company, Coupang Inc, the latest sign of a dramatic turnaround for its $100 billion Vision Fund.

Shares of Coupang opened 81% above their offer price on Thursday, after the company raised $4.6 billion in the U.S. stock market’s biggest initial public offering this year.

SoftBank paid around $3 billion for a 37% stake in the company, according to sources familiar with earlier fund-raising, giving it a roughly $33 billion headline profit if prices hold.

Coupang’s hugely successful stock market launch is welcome news for SoftBank, which is grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.

Vision Fund is Greensill’s biggest backer.

The Japanese conglomerate last month reported third-quarter net profit ballooned more than 20 times thanks to a recovery at the Vision Fund, a huge venture capital operation famous for investing early in Uber and other tech industry startup successes.

Only a year ago, SoftBank had been smarting from the flopped IPO and collapse in value of office sharing firm WeWork, raising questions over whether Chief Executive Officer Masayoshi Son had lost his midas touch and threatening plans to establish a successor to Vision.

The COVID-19 pandemic has also forced Son to sell assets but a second deal reported by Reuters on Thursday bodes well for VF II, a second, smaller fund.

The $225 million late-stage funding round for healthcare startup Forward Health was its first major investment this year, following a pickup in activity and the group’s fortunes in the second half of 2020.

The Vision Fund also made $11 billion on a blockbuster market launch of DoorDash Inc in December, which valued the food delivery company at more than $70 billion.

It also made gains on home seller Opendoor Technologies Inc’s initial offering in December.

The fund still holds large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab.

SoftBank is also trying to ride the mania for special purpose acquisition companies, launching a handful of blank-check firms this year, although none of them have found investment targets yet.

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Agence Francaise De Developpement (AFD) To €2 billion in Nigeria

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The French Development Agency (AFD) is a development finance institution 100 percent held by the French government.

In Nigeria, it is mainly into financing infrastructure projects (water, energy, transport and agriculture).

It also involves financing related to the banking sector, governance and the cultural and creative industries.

Speaking to the media, the AFD Country Director Nigeria, Pascal Grangereau, said €2 billion was set aside to be sent on mainly road financing, water sector, improvement in electricity and agriculture.

He said €300 million was being spent on the Abuja Electricity Backup, a project in collaboration with Transmission Company of Nigeria (TCN) to improve electricity at the nation’s capital.

Grangereau said a total of €200 million is equally expended on the North West Electricity Backup.

On agriculture, he said vocational training is currently held across the nation to improve the skills of Nigerians.

He added: “We intend to finance agricultural projects in five states, Benue, Imo and three other states to the tune of €50 million.”

He lamented that while it was endowed with reserves of crude oil and natural gas, Nigeria is characterised by power generation considered by the Nigerians themselves as not adequate.

He said concentrating more than half of the installed electricity capacity in West Africa, only half of which was harnessed by the country, implying a very low per capita consumption, limited access to electricity and frequent load shedding.

He added: “The sector is of strategic importance for successive governments, with the launching in the 2000s of a vast reform, supported by a massive investment plan; which reform although supported by the donors is yet to achieve the expected results. The project aims to strengthen the electricity transmission network, natural monopoly under the responsibility of the public company TCN, thus laying the foundations for a long-term partnership with TCN.”

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