2022 was a miserable year for global savers. Central banks hurriedly raised policy rates to combat inflation which caused prices to correct across equity and bond markets. Then inflation corroded whatever nominal returns were left. As we enter 2023, equity valuations and bond yields are far more convincing than a year ago. At some point - it is difficult to say exactly when - global markets will anticipate the easing of policy rates and assets will start to perform again. The reset in valuations and yields has created opportunities though not always in the same stocks, or sectors, as were favoured before.

US dollar savers have opportunities they have not enjoyed for years. US Government bond yields are at multi-year highs. Emerging market and developing market US dollar Eurobond yields have risen substantially. In cases where there is no actual risk of distress, African sovereign bond yields are attractive. We favour holding short-dated durations for now and taking medium and long-term durations when global market sentiment improves. This tactic means not getting the full benefit of an upturn in markets, but it reduces risk.

Naira fixed income savers benefit from the best conditions since 2019. The drought appears to be coming to an end, with 1-year T-bill yields edging up towards the level of inflation. Granted, rates are not there yet and may not actually exceed inflation this year, but conditions in the fixed-income markets have improved significantly since the Central Bank of Nigeria adopted an inflation-fighting stance last May. Investors' money is flowing back into Money Market Mutual Funds.....

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