Nigeria’s financial markets posted healthy gains last year, but five years after the global financial meltdown, local investors are still wary of sinking their money into stocks.
The market capitalization of the nearly 200 companies listed on the Nigeria Stock Exchange (NSE) rose by 41 percent in the 12 months to Dec. 31 last year to about 13 trillion naira (US$58 billion), while the All-Share Index on West Africa’s leading bourse closed up nearly one-third over the year to end at 41,329.19 points.
The figures indicated that the market appears to have rebounded well from the global crisis, which saw approximately 8 trillion naira wiped off the value of stocks. Industry operators say 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 reporters.
Investments from offshore accounted for about 60 percent of total transactions in the stock market last year, he added.
Also, the World Bank’s International Finance Corp (IFC), 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 [Nigerian] Securities and Exchange Commission for a naira-dominated medium-term notes program of US$1 billion,” Alogba said.
A US$1.5 billion African Development Bank facility for projects by telecoms firm MTN Nigeria Communications Ltd was also driving the market, he added.
Yet despite the more optimistic outlook — including for the Nigerian economy as a whole — Nigerians remain wary of sinking their cash into equities.
“Local investors cannot forget in a hurry [the] irrational manipulation of share prices which stock brokerage firms, in connivance with banks, engaged in to cause the market crash,” one stock analyst said.
Lagos businessman Soji Fadairo would rather forget what happened five years ago.
“Each time I tried not to remember, my memory keeps recalling how I lost my entire savings to [the] stock market crisis,” he said. “Overnight, my entire investment running to several millions of naira evaporated like air.”
Fadairo’s experience forced him to sell property in the upscale Ikeja neighborhood of Nigeria’s financial hub to offset a 5 million naira bank loan.
“I will never put my money on stocks again. Experience — they say — is the best teacher,” he said.
Funke Bello, a 45-year-old civil servant, also lost out, but has now dumped stocks for bricks and mortar to assure her long-term financial future.
“I used to be active on market with thousands of stocks in blue-chip companies. I was making a lot of money in terms of capital gains until the crisis,” she said.
The losses Bello suffered forced her to withdraw her son from his school overseas.
“I will not venture into stocks again. I am now into properties business. If you buy a house or a plot of land today and decide to sell it tomorrow, it will be at a good margin,” she said.
One senior manager at the NSE said that the future looked brighter for the market on the back of strong economic indicators for the country as a whole.
The economy is predicted to grow at a rate of 7 percent this year, the naira is stable against the US dollar, inflation is at a manageable 7.9 percent and interest rates are favorable for both savings and investment.
“A lot has changed since the global recession,” said the official, who requested anonymity. “Investors are also enjoying high returns on investment due to impressive performances of quoted companies.”
He urged reluctant investors to take advantage of the gains and pointed to new regulations designed to protect investors.
“We are poised to promote good corporate governance, as well as prevent inside dealings and abuse in the market,” the official added.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”