Nigerian Stock Exchange building
By Eromosele Abiodun
There are indications foreign portfolio managers across the asset classes are lining up to commit funds to the African continent, with the Nigerian capital market primed to attract a major stake in the outlay.
THISDAY findings revealed that the Nigerian capital market has been singled out as fertile ground for fresh investment following massive depreciation on stocks’ prices. Offshore portfolio fund managers currently trade about 80 to 90 per cent of the volumes being done in the Nigerian stock market on the most active stocks.
At the second annual African Capital Markets Conference (ACMC), co-sponsored by FBN Capital Limited, Nigeria featured in more presentations and panel discussions than any other country, with investors citing reforms and sound micro economic out-look as some of the reasons Nigeria should be considered for investments.
As a result, THISDAY checks showed that the capital market may get as much as N1.2 trillion ($6.2 billion) in the next few months.
Findings also revealed that some of the investors are worried by some of Nigerian Stock Exchange (NSE) procedures, which they stressed could be more investor-friendly. For example, it was noted that investors might know when a company has given its results to the exchange, but not when the exchange sees fit to release those results to the market.
Speaking at the ACMC meeting held in London, the head of investor relations at a popular Nigerian manufacturing company said there was need for improvement in corporate governance and disclosure in the Nigeria capital market to attract and retain more investors.
Also speaking at the meeting, a lawyer who do not want his name mentioned, said that the ad valorem stamp duty on security in a transaction was a major impediment to investment in Nigeria.
Meanwhile, analysts at FBN Capital noted that while the appetite for African risk has probably never been higher, it is highly selective.