Pension Funds Administrators (PFAs) investment in the local bourse fell 5.04 percent to N873.49 billion in the nine months to September 30, 2021, compared with N919.85 billion in January.
The year-to-date investment in the stock market accounted for 6.7 percent of the total PFAs investment during the period.
Data on PFAs commitment in the domestic equities market for the nine month period showed that total PFAs assets stood at N13.001 trillion. However, the PFAs shored up their stake in foreign equities within the same period.
The Pension Funds’ commitment in foreign ordinary shares rose by 18.3 percent to N105.2 billion from N88.9 billion in January. On a Y-o-Y basis, the figure rose by 37.6 percent from N76.46 billion in the corresponding period in 2020.
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Investment experts attributed the decline in PFAs exposure in local equities to political risk, and rise in interest rate in fixed income among others.
“The decline in PFAs’ investment in equities is due to rising interest in the fixed income bonds. Interest rate on FGN sukuk IV is 12.80per cent, while it is 11.20 per cent for FGN sukuk 111.
“The decline in the prices of some of the domestic stocks led to a decrease in their investment. For instance, Lafarge Africa was trading for as high N31.00 per share in January compared to N24.00 as at now, same with GTCO, PZ Cusson, and Unilever among others.
“On the other hand, the PFAs increased their investment in foreign shares to hedge against naira devaluation as returns are made in the USA dollar,” Managing director/CEO, APT Securities and Funds, Garba Kurfi said in response to the latest data on PFAs investment in the local market.