Following the equities market’s early week losses, the Nigerian financial market is showing signs of heightened volatility as investors shift their focus from stocks to safer instruments like government bonds. Analysts report that foreign portfolio investors have begun reducing exposure to Nigerian equities, citing economic uncertainties and currency fluctuations.
The FGN bonds are attracting renewed interest, with yields on the 10-year treasury bond climbing to 14.5%, signaling a flight to safer assets. Meanwhile, the equities market continues to experience pressure from profit-taking activities, particularly in banking and energy sectors.
According to Chukwuemeka Umeh, Senior Analyst at Stanbic IBTC, “Investors are recalibrating their portfolios. With inflation pressures and exchange rate volatility, fixed-income securities are currently more attractive than equities.”
Market observers warn that continued foreign outflows could weigh heavily on liquidity, potentially keeping the equities market subdued in the near term. However, they note that selective bluemchip stocks may still offer opportunities for long-term investors willing to weather short term volatility.
source: ripplesnigeria.com
