In the local stock market, Nigerian Pension Fund Administrators (PFA) have raised their holdings as investments passed the N1 trillion barrier, up N8.73 billion from the N999 billion recorded as of the previous month.
Compared to the N915.31 billion recorded at the start of the year, the investments made by pension managers on the local stock exchange have increased by N92.43 billion so far this year. According to data from the unaudited report on the pension funds sector for the month of May 2022, this is the case.
As a result of gains of N133.76 billion in the review month and N768.86 billion between January and May 2022, the total asset under management reached its highest level ever at N14.19 trillion.
As of May 2022, there were 9.67 million RSA registrations, which is an increase of 25,025 compared to the previous month. This is the greatest figure ever.
The bullish performance of the Nigerian Exchange in the review month, where the All-Share index, which serves as a benchmark for evaluating market performance, increased 6.75 percent to close at 49,638.94 basis points, suggests that pension fund administrators are increasing their investment in the local equity market.
Gains from McNichols, Cadbury, Abbey Mortgage Bank, and other companies helped the market capitalization rise by N1.8 trillion to conclude the month at N26.8 trillion.
Government securities investments also increased over the period under review, rising by N245.45 billion to N8.81 trillion, or 62.1 percent of the total asset. Due to the volatility in different investment portfolios, investors are now looking into government safe-haven assets such federal government bonds, treasury bills, agency bonds, Sukuk, and green bonds.
Investors are continually oversubscribing to government securities despite their negative real yield. Despite a negative real yield of 11.6 percent compared to an inflation rate of 17.71 percent, the last Central Bank Treasury Bills issuance for a one-year tenor in June was massively oversubscribed by 527 percent.
Although the Nigerian stock market has had an outstanding year thus far, the local exchange is now starting to experience the effects of the global increase in interest rates.
The All-Share Index’s month-to-date study reveals that the market has fallen 3.04 percent so far in June 2022, which may indicate that gloomy feelings are starting to take grip of the local market.
