Nov 6 (Lagos) - According to data from the National Bureau of Statistics (NBS), Pension Fund Administrators (PFA) participation in the Nigerian equity market has steadily increased through the year.
Total PFA asset under management (AUM) allocated to the domestic equity market increased from 8.13% at the end of 2016 to 8.66% at the end of Q3’17, representing a ?120 billion inflow over the period.
Analysts at Vetiva Capital Management Ltd in V.I note that this rise came within the backdrop of National Pension Commission (PenCom) regulations prescribing a new multi-fund structure for Retirement Savings Account that encourages greater equity exposure.
Furthermore, the Nigerian equity market rallied 32% in the first nine months of the year as some foreign investors returned to the Nigerian bourse following partial liberalization of Nigeria’s foreign exchange market. This development is also likely to have buoyed greater PFA participation in the market.
With implementation of the multi-fund structure extended until early-2018, we expect even more PFA participation in the near-term to provide support for the equity market.
Despite continued mixed sentiment across key sectors, the Nigerian Equity Market closed marginally higher (+17bps) on Friday, leading to a 131bps w/w gain.
Given the slightly positive market breadth (Advances – 23; Declines - 19) and strong closes across a few key sectors, we anticipate a positive trading session today.
reporting for easykobo.com on Monday, Nov 6 2017 from Lagos, Nigeria
Source - analysts at Vetiva Capital Management Ltd in V.I. All opinions/views/forecasts in this article are those of the analysts.