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A New Wave: Where to Invest in H2 2020

Some of the industries that are expected to succeed given the changing times are not your usual kinds of investments.

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A New Wave: Where to Invest in H2 2020

There are two kinds of people in the world: The ‘glass-half-empty’ kind, and the ‘glass-half-full’ people. Where some see problems, others see the opportunities – same glass, but different perspectives. 2020 might have left very little hope to hang on to, but the world is still in motion.

Amidst the chaos, many have found their diamonds in the rubble – and many more will. These people, however, will be those who are willing to adapt to the changing times by repositioning themselves to leverage the opportunities that arise.

The Covid-19 pandemic has proven to be a holistic challenge, bringing to the fore a myriad of issues. It has caused a dent in the revenue/ disposable income of many businesses and individuals alike, shaken the very balance of the economy with many countries heading for unprecedented recessions, and left everyone with so much uncertainty.

Yet, we are at the cusp of a new dawn. Processes are changing, new industries are emerging, and money is changing hands. Flexibility, automation, and sustainability are just some of the words that will make all the difference in the world of business.

Dr. Ola Orekunrin Brown, the founder of Flying Doctors – a healthcare investment company – had, at the Quarterly Economic Outlook Webinar hosted by Nairametrics, offered insights into some of the industries that are expected to succeed given the changing times, and they have been outlined below. But be warned, a lot of them are not your usual kinds of investments.

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READ ALSO: The week that shook the world: the collapse of the Lehman Brothers and the effect it had on me

Investment opportunities to leverage in H2 2020

Online Events

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One of the many trends that emerged in recent times, as a result of the Covid-19 pandemic induced lockdown in many parts of the world, is a huge dependence on internet technology and digital media. Everybody went indoors – and online. The entertainment sector found its home on social media through Instagram Live parties, Tik Tok, and the Houseparty App.

Companies went online as well, leveraging digital technology like Zoom, Microsoft Teams, and Slack. Even the lifestyle industry went online with online gym classes, yoga classes, and even karate classes. Not only have they provided much-needed solutions, they have also come with the additional benefit of convenience.

A good example of this is Eric Yuan, the founder of Zoom, who joined Forbes’ billionaires’ list for the first time as a result of the increased use of Zoom for work meetings. Apptopia, an App tracking firm, reveals that Zoom was downloaded 2.13 million times around the world on 23 March, the day the lockdown was announced in the UK– up from 56,000 a day and two months earlier.

Online education

Another feature of the digital economy lies in the education sector. With schools forcefully closed, classes have had to go online. Online courses, training workshops, and even full degrees will become more normal as those who work from home will see these online education courses as an opportunity to develop themselves with little effort.

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Investments here will be even more fostered by access to international markets, thereby increasing the market size. ResearchAndMarkets predicts that the online education market is poised to grow by $247.46 billion during 2020-2024, progressing at a CAGR of 18% during the forecast period.

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READ ALSO: Stay secure when shopping online – Follow these tips from Visa

Institutions that are too big to fail

The stock market is expected to be even more volatile, given the overall unfavourable economic terrain and a high level of uncertainty – especially with all the talks of a recession coming. In H1 2020, the more favourable companies to invest in are those that have stood the test of time – the stocks that are too big to fail.

Many of these stocks have been in existence for decades and have been able to attain a level of stability as a result of their large market share and stable structures. You want financially strong companies and the reason is not far-fetched; the goal is to put your money behind the companies that are strong enough to withstand the storm to a good extent.

Telecommunication

Another by-product of the Covid-19 induced lockdown is the increased need for internet services. Dr. Ola explains that the use of the internet as well as the move to work-from-home, are some of the megatrends of the times.

Good internet connectivity has proven to be the lifeblood that keeps digital entertainment trends, digital work trends, digital lifestyle trends, digital entertainment trends, and a huge chunk of the communication we have today. As a result of this, companies in the telecommunication industry have begun experiencing growth in revenue and earnings. Investments in this sector will most probably be worth your while.

READ ALSO: Banking related phishing up 9% in 2019, e-stores down 10%

Distribution & E-commerce

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When the Okada ban took place, several motorcycle companies that were affected were forced to pivot from transporting people to moving items as full-scale delivery businesses. While many might have thought that a bad idea, the lockdown has undoubtedly contributed to the development of this industry.

The e-commerce industry is also expected to thrive with trade moving predominantly to the internet. Investments in distribution companies and e-commerce businesses are also expected to be worth your while.

Stronger currencies

One of the major hits of the pandemic is the Nigerian foreign exchange market which has now become highly volatile. The demand for the dollar far outweighs the available supply and this has forced importers and speculators alike to scramble for what is available in circulation.

Given the challenges with the FX market, international spending on foreign denominated expenses like tuition fees or international loans will come at an increased cost. To mitigate foreign exchange loss challenges, investments in USD denominated equities, and Eurobond funds will help you withstand the storm. While gains here could have you betting against the Naira, having foreign investments in your investment portfolio will come in handy.

READ MORE: Edtech redefines learning during Coronavirus pandemic

Agriculture

The Agricultural industry is an expected gainer. One of the reasons for this is that local supply chains will expand, given the restrictions on the global supply chain as a result of the lockdown and the border closure. While this will also thrive, Dr. Ola Brown, explains that jobs will only be created in the short term.

This is because fewer hands will be required as productivity, better processes, and mechanization systems increase. An example of this is the new trend of robot herders in the United States. This is even more so as we compete with the rest of the world in production. Needless to say, Agriculture will always exist, given the need for food, as well as the rising global population.

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Healthcare

While the Covid-19 pandemic has a direct impact on the healthcare industry, the industry is a complex one. The first reason for this is that, with the healthcare infrastructure deficit in Nigeria, the government will need to invest in it to provide wide access.

With subsidies on healthcare, the free market in terms of investments might not be as lucrative with more people opting for government healthcare. However, given increased investments in the sector and the move to preventive health practices, the industry remains attractive.

For more detailed investment opportunities with specific stocks in the Nigerian Stock Market, sign up for the Nairametrics Stock Select Newsletter.

1 Comment

1 Comment

  1. Adegbemile Tolu

    May 20, 2020 at 1:12 pm

    Indeed they’re myriads of opportunities shrouded in the problems around us.

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Coronavirus

ECOWAS COVID-19: Nigeria drops to 7th position in recovery rate

According to data from ECOWAS Centre for Surveillance and Disease Control, Nigeria has dropped to 7th position in recovery rate.

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The ECOWAS COVID-19 daily update report, as of November 22nd, 2020, shows that Nigeria is ranked 7th on recovery rate (93.5%), 10th on death rate (CFR – case fatality ratio) at 1.76%, and 9th on active cases (4.7%) amongst the 15 member countries of the ECOWAS (Economic Community of West African States).

This data can be seen on the Twitter handle of the ECOWAS Centre for Surveillance and Disease Control.

A week ago, as of 15th November 2020, Nigeria occupied the 6th position in recovery rate (93.7%), 9th position in CFR (1.79%) and 11th position in active cases (4.5%).

According to the report, there are 209,614 confirmed cases, 2,842 deaths, 189,917 recoveries, and 8,849 active cases in ECOWAS countries. This data represents in Africa, 9.8% of the confirmed cases, 5.7% deaths, 10.9% recovery rate and 3.3% active cases.

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As regards the death rate (CFR), Liberia tops the list with 5.29%, followed by Niger 5.12% and Mali 3.41% while Guinea is the least with 0.58%.

On recovery rate, Cote D”Ivoire tops the list with 98.3%, followed by Senegal 97.5% and Ghana 97.1%, with the least coming from Mali with 71.1%.

Mali has more active COVID 19 cases with 25.5%, followed by Sierra Leone 20.9% and Togo 20.9% and with Senegal contributing the least with 0.4%.

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What you should know

  • As at November 22 2020, worldwide, there are 58,649,324 confirmed cases, 1,388,068 deaths and CFR of 2.3%
  • In Africa, there are 2,057,029 confirmed cases, 49,412 deaths and CFR of 2.4%
  • In West Africa, there are 201,614 confirmed cases, 2,842 deaths and CFR of 1.41%, with a recovery rate of 94.2%.

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Coronavirus

COVID-19: AstraZeneca vaccine could be 90% effective against the virus

AstraZeneca has said that its vaccine being developed in collaboration with the University of Oxford could be 90% effective.

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AstraZeneca suspends COVID-19 vaccine final stage trial over safety concerns, COVID-19: J&J starts vaccine trials on humans after success on monkeys

British pharmaceutical company, AstraZeneca, announced that the COVID-19 vaccine it is developing with Oxford University is 90% effective and also prevented 70% of trialists from falling ill.

This was disclosed by AstraZeneca on Monday and reported by Reuters and Bloomberg. AstraZeneca said its vaccine was 90% effective when a half dose was issued, followed by a full dose 30 days later.

AstraZeneca joins other major pharmaceutical companies including Pfizer and Moderna in the race to develop a vaccine for the pandemic.

What they are saying

Oxford University said it could be 70.4% effective and tests on two dose regimes show that it could be is 90%.

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Interim data shows the #OxfordVaccine is 70.4% effective and tests on two-dose regimens show that it could be 90%, moving us one step closer to supplying it at low cost around the world,” they announced on social media. Monday’s announcement came after trial data was released in the UK and Brazil.
“We see a lot of merit in this regimen and we will now start discussions with regulators into incorporating this dose combination for further clinical investigation,” an Astra spokesman told Bloomberg.
Chief Executive, Pascal Soriot, said: “This vaccine’s efficacy and safety confirm that it will be highly effective against COVID-19 and will have an immediate impact on this public health emergency.

The company expects to have up to 200 million doses by the end of the year and produce up to 700 million doses by the first quarter of 2021.

The new vaccine also answers issues of vaccine storage and distribution, as it can be kept at basic refrigerator temperature for transport, making it much easier to transport, compared to Moderna and Pfizer’s vaccines.

What you should know 

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Nairametrics reported earlier this month that Pfizer Inc disclosed that its experimental vaccine, which is jointly developed with BioNTech was more than 90% effective in preventing COVID-19, based on initial data from a large study, in the ongoing phase 3 trials.

Last week, Pharmaceutical company, Moderna Inc, stated its COVID-19 vaccine is 94.5% effective in treating coronavirus, after preliminary analysis of a large late-stage clinical trial.

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Coronavirus

COVID-19: G-20 to extend debt relief to developing nations

The G-20 has endorsed a plan which will enable the freezing of debt obligations to developing nations.

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Kristalina Georgieva, IMF boss hints at 'synchronized slowdown' in global growth , IMF: 40% of African countries can't pay back their debts , Nigeria worse off, posts grows lower than LIDC benchmark - IMF, Measures introduced by Nigeria to ensure transparent use of the $3.4b IMF loan

The G-20, in a bid to combat the economic fallouts of the pandemic, has endorsed a plan which will enable the freezing of debt obligations to developing nations till mid-2021.

This was reported by Reuters after the group met over the weekend to discuss vaccine relief and other pressing issues. They also agreed on a common approach to dealing with debt relief.

The G-20 leaders announced in a communique urging private creditors to extend debt relief to nations that are eligible for the initiative.

READ: Africa seeking extra $44 billion to deal with COVID-19 pandemic

What they are saying

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The Head of the International Monetary Fund, Kristalina Georgieva, urged that the world still runs the risk of falling into another crisis and called for closer cooperation through faster integration of the G-20 Framework. She added that the G-20’s efforts in combating the pandemic have helped soften the economic fallout caused by covid-19.

“The world is not out of the woods yet in terms of this crisis. Cooperation is going to be even more important going forward,” she said.

READ: Nigeria to generate $6 billion through Blockchain by 2030-NITDA

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“We must also help those countries not covered by the Framework to address debt vulnerabilities, so that their economies can become more resilient,” she added.

What you should know 

Nairametrics reported that the G-20 met earlier this weekend and agreed to announce a pledge to pay for vaccine distribution to developing nations that can’t afford it. The leaders also discussed a debt extension programme to developing nations during the weekend’s G-20 summit.

READ: Largest private investment in Africa begins $15 billion financing

In April 2020, Ministers of Finance from African countries requested debt relief from bilateral, multilateral, and commercial partners to cushion the negative impact of the coronavirus.

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(READ MORE: Covid-19: Nigeria to seek $750 million from World Bank- Finance Minister)

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Last Month, Nairametrics reported that the total external debt of the least developed countries under the Debt Service Suspension Initiative (DSSI) has increased by 9.55% to $744 billion in 2019. This was disclosed in the World Bank’s International Debt Statistics 2021.

The global Debt Service Suspension Initiative by rich nations made it eligible for 73 countries to have their debt frozen. However, only 46 countries took part in the initiative, freezing up to 5.7 billion in 2020 debt service payments.

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