Nigerian markets improve, but investors still shy

By Joel Olatunde Agoi, AFP

LAGOS — Nigeria’s financial markets posted healthy gains in 2013 but five years on from the global financial meltdown, local investors are still wary of sinking their money into stocks. The market capitalization of the nearly 200 listed companies on the Nigeria Stock Exchange (NSE) rose by 41 percent in the 12 months to Dec. 31 to around 13 trillion naira (US$58 billion).

The All-Share Index on West Africa’s leading bourse closed up nearly a third over the year, to 41,329.19 points. The figures indicated that the market appears to have rebounded well from the global meltdown, which saw some 8 trillion naira wiped out the value of stocks.

Industry operators said the market has been buoyed by foreign investors looking for bargains.

“Foreigners made our capital market their investment destination as a lot of shares were selling far below their par value following the 2008 financial crash,” broker Mukaila Alogba told AFP.

Investments from offshore accounted for some 60 percent of total transactions in the stock market in 2013, he added. Also, the World Bank’s International Finance Corporation, which backs private enterprise, floated 12 billion naira in bonds to lure investors into Nigeria’s nascent capital markets, he said.

“The IFC also approached the Securities and Exchange Commission for a naira-dominated medium-term notes program of 1 billion dollars,” Alogba said.

A US$1.5 billion African Development Bank facility for projects by telecoms firm MTN was also driving the market, he added. Doubts Persist Since

Market Crash But despite the more optimistic outlook — including for the Nigerian economy as a whole — Nigerians remained wary of sinking their cash into equities.