Nigeria. Pension fund investment in equities up 7.4% to N1.1trn due to stock market boom
The rising fortunes of investors in the nation’s stock market, as reflected in the 22.4 per cent year-to-date growth in total value of equities on the Nigerian Exchange Limited, NGX, has triggered a 7.4 per cent increase in the value of pension funds investment in equities to N1.1 trillion.
This is in sharp contrast to 0.4 per cent growth in pension funds investment in federal government bonds recorded during the same period, which is the preferred and less risky investment option for Pension Fund Administrators, PFAs.
According to data by Pension Commission of Nigeria, PenCom, Pension Fund Net Asset Value in FGN Bonds grew to N8.808 trillion in May 2022 from N8.773 trillion at the end of December 2021. The marginal growth follows a 32 basis points decline in yield on FGN Bonds recorded during the period.
Analysts however projected that the rise in pension fund investment in equities may not persist in the second half of the year, H2’22, citing the expected rise in yields on FGN bonds and other fixed income investment following the commencement of tight monetary policy by the Central Bank of Nigeria, CBN.
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