Macro Trends

©2018. The Norrenberger Financial Group.
Norrenberger is an integrated financial services group licensed and regulated by the Central Bank of Nigeria (CBN) and the Securities and Exchange
Commission (SEC).
by
Michael Chukwuemeka Uzuegbunam
March 2019
Macro Trends

Commission (SEC).
Our vision and mission
Our vision is to
simplify
wealth
creation
Our mission is
to positively
unlock the
opportunities
in society

Commission (SEC).
Table of Contents
i. Objectives
ii. Macro-Trends: Definition and Concept
• Hierarchy of Trends
• Kinds of Macro-Trends
• The Macro environment
iii. Emerging Macro-Trends in Nigeria
iv. Why Macro-Trends matter
v. What successful Asset Managers of the
future look like

Commission (SEC).
Objectives
• To understand the definition and concept of Macro-Trends
• To appreciate some Macro-Trends discoverable in Nigeria
• To recognize why Macro-Trends matter in business forecasting and
positioning
• And, to realize the future expectations of the Asset Management
subsector of Finance

Commission (SEC).
Macro-Trends: Definition and Concept
 Trends are directional shifts or changes in a situation, which can be observed on
a scale, ranging from very fine-grained to global in scope. The duration of a trend
also affects its scale. Macro trends, as the name implies, are major in scope and
long lasting. They affect the environment in which businesses operate, even if the
business itself doesn’t seem related to the subject area of the trend.
 Macro trends, also called Global Trends, are directional shifts that involve large
populations and last 5 to 10 years or more. They are longer-term societal
changes that drive things - we’re thinking about them in the short term, and
considering how they will impact things in the long term. Some examples might
be the aging of a population, the development of global connectedness through
social media, and the advances in technology as manifested in smart homes and
the “Internet of things.”

Commission (SEC).
Hierarchy of Trends
 Macro-Trends don’t exist in a vacuum, but rather they arise out of an even
broader, longer-lasting directional shifts known as Mega-Trends. Macro trends,
in turn, generate Micro-Trends, which are smaller in scope and typically last
three to five years. Then there are Fads, which are even more ephemeral than
trends and affect a smaller population, such as a defined age group.
 A phenomenon can arise at one level of the hierarchy and expand or contract to
encompass other levels. For example, when Facebook originated in 2004, it was
shared among a small group of students in the Cambridge, Massachusetts area.
With this small beginning, it may have been considered a fad, or at best a
micro trend. Today, Facebook is a macro-trend that is propelling a mega-trend
of Global Connectedness.

Commission (SEC).
Micro Trends Macro Trends Mega Trends
Description First concrete
signs of emerging
trends
Observable
changes pointing
into a specific
direction
Major
sociological,
economic,
political,
environmental
technological
changes
Effect duration 3 – 5 years 5 – 10 years 25 – 30 years
Scope Frequently limited
to certain regions
and markets
Widespread, but
do not necessarily
influence all
stakeholders and
regions
Imparts all walks
of life worldwide
Examples Bicycle Culture,
Home robots,
Mobile
recruitment
Shoppertainment,
Quantified self,
Collaborative
consumption,
Cyber crime
Urbanization,
Climate change,
Digitization,
Individualization

Commission (SEC).
Kinds of Macro-Trends
There are two kinds of Macro-Trends;
1. Short-Medium Term Macro-Term:
They are those that will impact on our activities over the next 5 – 10 years. They
are as a result of political, social and economic changes that prompt companies to
react and adapt to new market conditions.
2. Long Term Macro-Trends:
This develop over periods of 15 – 30 years and are prompted mainly by new
scientific and technological discoveries or by changes in the availability of natural or
environmental resources. They do not directly impact on the industry and are
difficult to identify

Commission (SEC).
 Every business lives within an environment of forces beyond its control. The
DESTEP model describes these forces as Demographic, Economic, Political,
Ecological, Socio-Cultural and Technological. For example, climate change is
an ecological force, with worldwide implications that will undoubtedly last for
decades, if not centuries. Within the umbrella of climate change, there are
macro trends that operate on a smaller scale. Some operate regionally, such
as the increased risk of flooding in coastal areas. Other related trends might
operate within a business sector, such as raw materials scarcity or interruption
of delivery schedules due to severe weather events.
 These climate-related challenges are also accompanied by emerging macro
trends that create opportunities. Some examples are the rise of ethical
business models, the trend towards ethical consumption and the growing
consumer preference for renewable energy sources.
Macro Environment

Commission (SEC).
Analyzing Macro-Trends is done by looking at certain regions and more
specific target audience, e.g., Nigeria
Some of the emerging Macro-Trends in Nigeria are:
 Attention Economy
 Social Media: Crowd Action
 Cyber Crime
 Food Fashion
 Digital DNA: Internet of things (Iot)
 Customization
 Solution as a service
 Urbanization
 Aging
 Militancy/insurgency
 Political party divides across geopolitical zones
Emerging Macro-Trends in Nigeria:

Commission (SEC).
1. While it may not be immediately apparent, macro trends have an impact on
the stock market, and as such, are worth keeping an eye on. Perceptions
and expectations of macroeconomic trends affect the fundamental value of
all traded securities. The interest rates often follow expected inflation and
operating rates of an economy, equity valuations are linked to economic
growth. Therefore, changes in macro trends, whether abrupt or gradual,
are major “market movers”.
2. It can tell which sector is healthy enough to be tapped into or otherwise
3. Macro-Trends are capable of affecting/disrupting business. Therefore it is
important when developing a company’s strategic plan in order to anticipate
and better adapt to potential changes that may occur in our socio-economic
environment.
4. Because we are living in times of change and change is constant, Macro-
Trends typically represents that.
Why Macro-Trends Matter:

Commission (SEC).
What the successful Asset Managers of the future look like
The combination of new technologies, shifting demographics and client needs is
bringing a sea change to the asset management industry. To ensure survival and
relevance, below are some of the expectations:
 Systematically identifying new sources of alpha amid stagnant market. The
manager will need the acumen to identify specific investment opportunities and
allocate capital across multiple asset classes in an agile fashion.
 Investing thematically: Thematic investing is a strategy whereby investors identify
macro trends that will benefit certain sectors and invest in stocks in these sectors,
with the objective of beating the broad-based market returns.
 Flexibility as a result of various customer preferences. Develop products that will
cater for different customer needs.
 The asset management firm of the future will learn to view risk holistically and
pay attention not just to lagging indicators (losses) but to leading indicators
(talent retention, investment in infrastructure, succession planning) related to its
long-term enterprise health and, ultimately, delivering client results.

Commission (SEC).
 Advancing technology: Technology is reshaping asset management and will
contribute to alpha generation and transparency. The asset manager of the
future will use technology to rebalance value from the firm back to investors.
Internally, the manager will invest in technology to gain a competitive investment
edge: artificial-intelligence and big-data capabilities and more-seamless
integration of front- and back-office processes will become the baseline.
Externally, technology solutions will pierce the veil of mystery for investors.
 Cultivating and keeping talent will be critical for success. The investment industry
today is very immature in its human capital management. As founders age and
investor demographics change, established investment firms risk a talent crisis
and will have to rethink how to attract, develop and retain people. “Purpose-led
companies are more likely to have employees who exhibit cohesive behavior and
act in the best interest of the company and the investors,” says Jeff Hunter,
founder of Westport.
What the successful Asset Managers of the future look like:
Cont’d

Commission (SEC).
What the successful Asset Managers of the future look like:
Cont’d
 The asset manager of the future, in both the retail and institutional spaces, will
create and guard the trust of investors at all costs. A leading manager of the
future must embrace far higher levels of transparency than has been the norm. At
the niche of time, investors will see who has been working in their best interests.
 Trust will be by far the biggest competitive advantage of the asset manager of the
future – simplicity and transparency that is what the investor of the future crave.

Commission (SEC).
Questions

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Macro Trends

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