The year 2022 was an auspicious year for investors in the financial market. As the global economy came under significant pressure, the domestic financial market’s performance mostly tracked well with original expectations, with the variance stemming from the lower-than-expected yield rise. 

The fixed income market was quite volatile in the year, with yields trending northwards and touching levels last seen in 2019. A switch to a hawkish stance by the Monetary Policy Committee of the CBN and the demand and supply imbalance drove the upward tilt of the naira curve. However, we believe the rise in yields should have been steeper, considering the government’s inability to implement its external debt issuance program, which should ordinarily increase the FG’s reliance on the domestic market. However, this eventuality was circumvented by the FG’s continuous use of the CBN’s Ways and Means. 

On the other hand, the equities market's performance was mixed. A combination of significantly positive earnings with its associated dividend declarations, an accommodative monetary policy stance, and sustained FPI interest in fungible stocks underpinned the stellar H1-22 performance on the domestic bourse. However, the story turned sour in the year’s second half, as investors rebalanced portfolios following the uptick in fixed income yields and a shortfall in liquidity, given the deliberate actions by the monetary authorities to hike interest rates. It is pertinent to note that the impact of electioneering activities on the equities market was less pronounced than in previous pre-election years.