Foreign, Nigeria Monetary Policies To Cause Capital Market Volatility Next Year

ValuAlliance Value Fund, formerly called the SIM Capital Alliance Value Fund, has hinted that foreign and domestic monetary policy actions will lead to volatility in the Nigerian stock market in 2021. The Investment company said this while revealing factors that will contribute to the volatility of the market next year.

According to the Fund Manager, in a Full Year projection for June 30, 2021, Nigeria's domestic capital market will become volatile by first half period of next year, and several key factors will contribute to the market volatility, part of which are monetray policies within the country, global politics and geopolitical uncertainty.

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AllNews gathered from a Value Fund statement obtained, that COVID-19 will still play a major role disrupting the capital market, as it is one of the key factors to cause market volatility in 2021, "For the FYE 30th June 2021, the Fund Manager expects factors that include COVID-19, global politics, geopolitical uncertainty, foreign and particularly domestic monetary  policy actions, amongst others to contribute to market volatility in the domestic capital markets."

Market Volatility Won't Block Opportunities For Investors

Despite forecasting a volatile market come next year, the Value Fund stated that it also projects attractive opportunities for investors. The company stated that the opportunities are embedded within listed and unlisted equity markets, but for investors with long-term plan.

"The Fund Manager expects attractive entry opportunities in both the listed and unlisted equity markets for long-term value investors and will seek to take advantage of theseby selectively increasing the Value Fund’s equity exposure." Value Fund stated.

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Meanwhile, it stated that, "Concurrently, the Fund Manager will continue to review the ValueFund’s existing holdings and will potentially trade out of equity positions that are determined to be trading close to intrinsic value or at a premium to intrinsic value.

"In the fixed income space, the Fund Manager will continue to seek and take advantageof attractive opportunities while working to ensure optimal portfolio diversification and flexibility in the evolving domestic fixed income market," the statement reads.