After an impressive first half, the current bull run in stock markets is likely to continue for the second half of 2021 – but there are also headwinds on the horizon, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The bullish message from Nigel Green, the chief executive and founder of deVere Group which has $12bn under advisement, comes as analysts watch to see if the MSCI AC World Index’s gains of around 12% hold through 30 June, they would be beaten only by a 15% rise in 2019.
Mr Green says: “Global stocks are headed for their second-best performance since 1998 for the first half of this year.
“After a highly impressive run in the first half of 2021 and the second quarter, what happens next? Will it continue?”
He continues: “Yes, the current bull run in stock markets will continue for the second half of 2021.
“The continuing robust economic growth in major economies, strong corporate earnings, ultra-low interest rates, and a sleeping bond market, will all mean that investors looking for yield will keep piling into equities, topping up their portfolios to build wealth.
“There’s more than a hint of Goldilocks in the near-term.”
But the upbeat sentiment gripping global stock markets also needs to remain in-check as headwinds loom on the horizon.
“Investors must avoid complacency in the second half 2021. There are two key things they should watch out for.
“First are changes to policies as central banks and governments look to scale back their unprecedented support, which has helped bolster asset prices.
“Second is inflation. It remains too early to say either way whether inflation is transient or persistent. But the debate will stir-up volatility which will define the second half of 2021 in global financial markets.
“Of course, if we get more sustained inflation, central banks will have to start moving sooner rather than later on interest rates.”
Mr Green concludes: “The factors that have driven the first half of the year will continue – and some may develop even further – in the second half, meaning the bullish sentiment will maintain its grip over stock markets.
“Whether the second half performs quite as brilliantly as the first is unsure, but the opportunities for strong returns for investors remain.”
NGX Index Sheds 0.79 Percent on Thursday
The Nigerian Exchange Limited (NGX) Index dipped by 0.79 percent on Thursday to extend its bearish trend to 38484.82 index points.
Investors traded 259.968 million shares worth N1.982 billion in 4,975 transactions during the trading hours of Thursday, against 237,510,446 shares worth N1.882 billion traded in 4,305 transactions during the trading hours of Wednesday.
Market capitalisation of listed stocks declined by N16 billion from N20.211 trillion recorded on Wednesday to N20.051 trillion on Thursday.
|TRIPPLEG||N 0.90||N 0.99||0.09||10.00 %|
|REGALINS||N 0.41||N 0.45||0.04||9.76 %|
|CHIPLC||N 0.54||N 0.59||0.05||9.26 %|
|PRESTIGE||N 0.45||N 0.49||0.04||8.89 %|
|ACADEMY||N 0.35||N 0.38||0.03||8.57 %|
|OANDO||N 5.26||N 4.75||-0.51||-9.70 %|
|UACN||N 11.20||N 10.20||-1.00||-8.93 %|
|LINKASSURE||N 0.65||N 0.60||-0.05||-7.69 %|
|FTNCOCOA||N 0.53||N 0.49||-0.04||-7.55 %|
|UPDC||N 1.26||N 1.19||-0.07||-5.56 %|
Robinhood Falls in Trading Debut Closes 8.4% Lower at $34.82 Per Share
The investing app tumbled in its highly anticipated trading debut on Thursday, closing 8.4 percent below its initial public offering price.
Robinhood stock opened at $38, matching the IPO price, and quickly fell more than 10 percent. The stock later climbed to approach the IPO price before falling again in the final hour of trading to close at $34.82, Robinhood’s market capitalization was about $29 billion.
It was a disappointing debut for the company that brought the markets to the masses. Robinhood and its bankers tried to avoid a poor first-day performance by pricing shares at the bottom of its targeted range at a value of about $32 billion. A successful first day was the more important because Robinhood sold a big chunk of its shares to its own customers.
According to people familiar with the matter, breaking the Wall Street convention of giving individual investors only a minuscule slice of hot IPOs, Robinhood sold between 20 percent and 25 percent of its offering to its customers.
“One of our company values is ‘participation is power,’” Chief Executive Vlad Tenev said in an interview. “It didn’t seem right for us that IPOs had typically been reserved for the top 1 percent.”
Trading for the first time under the ticker HOOD, the online brokerage hit the public markets it seeks to democratize for amateur investors.
Robinhood, whose stock trading app has surged in popularity among retail investors is valued at 10.5 times forward EBITDA.
The company sold 52.4 million shares, raising close to $2 billion. Co-founders Vlad Tenev and Baiju Bhatt each sold about $50 million worth of stock. The company was last valued in the private markets in September at $11.7 billion.
Goldman Sachs and JPMorgan Chase are the investment banks that led the deal. Underwriters will have an option to buy an additional 5.5 million shares.
Unlike many recent IPOs, Robinhood was profitable last year, generating a net income of $7.45 million on net revenue of $959 million in 2020, versus a loss of $107 million on revenue of $278 million in 2019.
However, the brokerage had a loss of $1.4 billion in the first quarter of 2021 tied to emergency fundraising-related losses during January’s GameStop trading mania. The company generated $522 million in revenue in the quarter, up 309 percent from the $128 million earned a year earlier.
Nigerian Exchange Limited (NGX) Dips Slightly on Wednesday
The Nigerian Exchange Limited closed lower on Wednesday as listed companies started releasing their first half of the year financial results. The Nigerian Exchange Limited dipped by 0.03 percent to 38791.03 index points.
Investors traded 237,510,446 shares worth N1.882 billion in 4,305 transactions during the trading hours of Wednesday. While the market capitalisation of listed equities moderated to N20.211 trillion.
Oando led the most traded stocks with 442.901 million shares valued at N232.963 million. This was followed by bank stocks as shown in the table below.
Capital Hotel Plc led gainers with N0.26 or 9.85 percent to close at N2.90 a unit. This was trailed by Oando as shown in the table below.
|CAPHOTEL||N 2.64||N 2.90||0.26||9.85 %|
|OANDO||N 4.79||N 5.26||0.47||9.81 %|
|BOCGAS||N 8.45||N 9.20||0.75||8.88 %|
|FTNCOCOA||N 0.49||N 0.53||0.04||8.16 %|
|LIVESTOCK||N 2.29||N 2.40||0.11||4.80 %|
|CHIPLC||N 0.60||N 0.54||-0.06||-10.00 %|
|TRIPPLEG||N 1.00||N 0.90||-0.10||-10.00 %|
|PHARMDEKO||N 1.21||N 1.09||-0.12||-9.92 %|
|REGALINS||N 0.44||N 0.41||-0.03||-6.82 %|
|ETERNA||N 7.60||N 7.10||-0.50||-6.58 %|
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