Covid was the ‘earthquake,’ but investors now need to prepare themselves for the growing ‘aftershocks’, warns the founder and CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The warning from deVere Group’s Nigel Green comes as concerns mount over the economic slowdown in China, global inflationary pressures and turbulence in emerging markets.
Mr Green observes: “Covid was like a monumental earthquake that shook the world economy to its foundations – and like major earthquakes, there are potentially highly damaging aftershocks.
“For many, life is almost back to normal, but investors need to be aware of the ongoing multiple investment headwinds that have come about as a direct result of the pandemic.
“It’s our belief that there are three main causes for growing concern that could hit investors’ returns.
“First, there’s an increasing consensus that China’s economy – the world’s second-largest – is likely to slow faster than many analysts had previously anticipated.
“Growth could slump below 5% as a perfect storm is brewing with Beijing moving to reduce its dependence on real estate, to increase regulation in a range of key sectors from education to technology, plus they’re dealing with a serious energy crisis and the lingering impact of the pandemic.
“China’s slowdown will have serious and far-reaching effects for economic growth across the world.
“Second, the risk of inflation moving from ‘transitory’ to ‘permanent.’ If high prices for commodities and supply chain disruptions continue in 2022, which many are assuming they will, the global economy may face the risk of rising persistent inflation.
“This will mean that interest rates rise higher and faster than the markets expect, which could trigger ongoing global stagflation.
“And third, as this rising inflation threat has increased the pressure on central banks to ease their stimulus programmes earlier than anticipated, is likely to create turbulence in emerging markets.”
With many Covid-triggered headwinds picking up pace, how can investors prepare to mitigate the effects and seize the inevitable opportunities that arise from volatility?
“Despite these aftershocks, which would normally drive investors to increase their exposure to fixed-income, it’s almost universally agreed that stocks will continue to outperform bonds. There’s no real alternative,” says Nigel Green.
“Given the mounting upheaval, investors should stay in the market but should review their portfolios to ensure that they are properly diversified across asset class, sectors, regions and currencies. This will best position them to get the best outcomes.”
He concludes: “The increasing worry about the aftershocks to the global economy will continue in the near term. What will savvy investors do? Judiciously buy more stocks.”
Baker Hughes Set to Boost Nigerian Energy Landscape with Refinery Investments and Oil Field Bid Participation
Global oil and gas giant Baker Hughes has expressed its commitment to invest in Nigerian refineries and actively participate in the upcoming bid round for marginal oil fields, according to an announcement by the Federal Government on Sunday.
The announcement followed a meeting between Nigeria’s Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, and Baker Hughes Chairman/President Lorenzo Simonelli at the 28th United Nations Climate Change Conference in the United Arab Emirates.
During the meeting, Baker Hughes expressed its eagerness to sustain and enhance its investments in Nigeria’s oil and gas industry, particularly showcasing interest in contributing to the country’s refinery sector.
Simonelli emphasized the company’s commitment to supporting Nigeria’s energy transformation agenda.
“Nigeria is a blessed nation with vast potentials and great opportunities in diverse sectors. As a partner with the Federal Government over the years, we are inspired to direct investment in the refinery domain of oil and gas,” said Simonelli.
In response, Minister Lokpobiri welcomed Baker Hughes’ move, highlighting the pivotal role Nigeria plays in the global energy landscape.
He expressed optimism about deepening collaboration and assured the company of the Federal Government’s commitment to creating an enabling environment for investments in the refinery sector.
“I am very happy that you have joined other companies in identifying the great opportunities and government’s favourable policies in our oil and gas sector,” Lokpobiri stated.
Additionally, the Minister’s media aide confirmed Baker Hughes’ interest in participating in Nigeria’s forthcoming marginal oil fields bid round, signaling a broader engagement in the nation’s energy sector.
This move aligns with Nigeria’s efforts to revitalize its oil and gas industry, with ongoing rehabilitation works at the country’s three refineries and the anticipation of increased investments under the new Petroleum Industry Act (PIA).
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