Investors shun cheap stocks in Nigeria as risks pile up

ABUJA: Nigerian stocks are signalling better returns than less-risky local debt markets, where rates are at the lowest in a decade. Yet investors are shunning the opportunity, wary of a mix of domestic and external threats.

Trading in equities on the Lagos stock exchange slumped 57% in June from a year earlier, figures from the bourse show. Pension fund managers aren’t favouring the market either: just 4.9% of 10.8 trillion naira (US$28bil) in retirement savings assets is invested in domestic equities, compared with 5.7% in January and an average permitted ceiling of 15%, according to pensions commission data. The benchmark Nigerian stock index is heading for an annual decline for the fifth time in the past six years.