Economy

Investment Opportunities for Retail Investors

Published

7 years ago

07/05/2019

By FSDH Research

There are now investment products in the Nigerian financial market for all Nigerians, irrespective of their income level. Opening an investment account is now easier than ever, after meeting the basic regulatory Know Your Customer (KYC) requirements.

In fact, in some cases, it could be as simple as A, B, C. Technology has made the process of transferring money into an investment account easy, simple and convenient. Since direct cash payments into investment accounts are not allowed in all cases, investors can now transfer money into their investment accounts through their phones and other convenient online platforms.

A mutual fund is an instrument that creates investment opportunities for retail investors in Nigeria. So instead of stacking your hard-earned money in a place where it does not increase in value, why not commit to a mutual fund and let your money start working for you, even when you are sleeping.

Mutual funds provide retail investors with an opportunity not only to preserve their wealth, but to grow their money. They are similar to the ‘esusu’, ‘ajo’ or ‘adashe’ systems prevalent in Nigeria where a group of people contribute monies on a regular basis to a common purse, usually managed by the leader.

After a specified period, say a week or a month, each person gets back his or her money after paying some sort of commission to the manager. Mutual funds are also similar to piggy banks, which are used to encourage savings amongst both children and adults.

However, mutual funds are better than these forms of savings because the managers of these funds invest the money paid into mutual funds accounts to generate additional income. The fund managers pool funds from various individuals and invest them in financial securities such as Nigerian Treasury Bills, Government Bonds, Commercial Papers, Real Estate and Stocks and Commodities.

In addition, mutual funds offer other benefits to the retail investor. Investors benefit from lower transaction costs. Since knowledgeable and experienced fund managers manage the fund, retail investors can sleep with both eyes closed. The fund managers make the ‘what’, ‘when’ and ‘why’ investment decisions on behalf of the investors in a bid to protect investment and earn the maximum return possible. Fund managers decide what security to invest in, when to do so and why.

From a national perspective, the monies from mutual funds could help to increase savings level in Nigeria, which is currently low compared to other countries. Investment in mutual funds is also a way to provide both short-term and long-term capital for companies and government to expand operations and improve infrastructure. This would help increase production, employment and consumption, and stimulate the economy.

Government would also be able to generate greater revenue through taxes on businesses.

In Nigeria, the Securities and Exchange Commission (SEC) regulates mutual funds operations and the professionals that are involved in them.

Most mutual funds are open-ended investment schemes: new investors can buy additional units at any time. The fund managers are also able to provide active liquidity by buying units from existing investors who want to sell units for cash.

Mutual funds offer investors an opportunity to diversify their investment portfolio. The existence of a Trustee and Custodian to a mutual fund ensures the safety of investments, as the Trustee ensures that the fund is managed in line with approved investment guidelines, while the Custodian holds the fund assets in safe custody.

The mutual fund assets in Nigeria have grown significantly in the last five years, an indication of the growing interest in this class of investment.

Data from the SEC on the Net Asset Value (NAV) of all registered mutual funds in Nigeria shows that the collective NAV grew by 328% between 18 April 2014 and 18 April 2019. This translates to a Compound Annual Growth Rate (CAGR) of 34% between this period.

Despite the impressive growth rate, FSDH Research notes that there is significant room for growth in mutual fund assets as we estimate the ratio of mutual funds to the country’s Gross Domestic Product (GDP) to be 0.57%.

FSDH Research notes, however, that mutual funds need more support than is currently available to enable potential investors to fulfil their wealth creation and developmental goals. Government, regulators and the operators in investment management need to provide mutual funds additional support. Government should intensify its efforts at improving the business environment. This will lead to job creation in the country, consequently reducing unemployment, increase savings and investable funds. Regulators could promote innovative legislation to increase investment in mutual funds and expand investment channels to increase returns on the funds invested.

The Fund Managers Association of Nigeria (FMAN) should continue to create public awareness on the benefits of mutual funds in order to generate interest from the investing public.

Economy

NASD Exchange Falls 0.22% After Investors Lose N4.8bn

Published

20 minutes ago

29/04/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange weakened by 0.22 per cent on Tuesday, April 28, with the market capitalisation down by N4.8 billion to N2.420 trillion from N2.425 trillion, and the NASD Unlisted Security Index (NSI) down by 9.01 points to 4,044.96 points from 4,053.97 points.

During the session, the price of Central Securities Clearing System (CSCS) Plc went down by N1.82 to N767.05 per share from N78.87 per share, while FrieslandCampina Wamco Nigeria Plc appreciated by N1.90 to N100.00 per unit from N98.10 per unit.

According to data, the value of trades increased by 265.7 per cent to N27.1 million from N7.4 million units, and the volume of transactions surged by 305.2 per cent to 1.3 million units from 319,831 units, while the number of deals decreased by 6.9 per cent to 27 deals from 29 deals.

Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 59.8 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.

GNI Plc also finished as the most traded stock by volume on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.

Economy

Naira Crashes to N1,380/$ at Official Market, N1,390/$1 at Black Market

Published

49 minutes ago

29/04/2026

Adedapo Adesanya

By Adedapo Adesanya

Pressure is beginning to mount on the Nigerian Naira in the different segments of the foreign exchange (FX) market despite an oil windfall triggered by the Middle East crisis.

On Monday, April 27, the domestic currency further weakened against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) by N16.47 or 1.2 per cent to N1,380.71/$1 from the previous day’s N1,364.24/$1.

It was not different against the Pound Sterling in the same market window, as it lost N16.04 to trade at N1,863.76/£1 versus Monday’s closing rate of N1,847.72/£1, and against the Euro, it slipped by N12.72 to close at N1,615.01/€1 versus N1,602.29/€1.

The Naira also depreciated against the Dollar at the black market yesterday by N5 to quote at N1,390/$1 compared with the previous price of N1,385, and at the GTBank forex counter, it further crashed by N9 to settle at N1,379/$1 compared with the preceding session’s N1,370/$1.

The continued decline of the Naira comes as traders increasingly seek other safe-haven currencies amid continued global disruptions.

The benefit awash in the global market is making foreign portfolio investors stay short in Nigerian markets. Despite this, the daily FX publication released showed that interbank turnover rose to $98.829 million across 78 deals, up from $76.65 million.

Meanwhile, the cryptocurrency market remained cautious, with Bitcoin (BTC) trading at $77,216.66 despite surging oil prices and geopolitical tensions over a potential extended US naval blockade of the Strait of Hormuz.

Analysts say the supply overhang has finally dried up, and the sellers who were spooked by macro shifts or quantum fears have already exited, leaving the market much thinner on the sell-side.

Investors will await decisions made by central banks this week. The US Federal Reserve will announce its rate decision later on Wednesday, while the European Central Bank (ECB) follows on Thursday.

Ethereum (ETH) gained 1.5 per cent to trade at $2,324.59, Dogecoin (DOGE) chalked up 1.4 per cent to sell for $0.1016, Solana (SOL) appreciated by 0.6 per cent to $84.85, Cardano (ADA) grew by 0.5 per cent to $0.2483, and Binance Coin (BNB) advanced by 0.2 per cent to $627.15.

However, TRON (TRX) depreciated by 0.6 per cent to $0.3224, and Ripple (XRP) lost 0.03 per cent to sell at $1.39, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were unchanged at $1.00 each.

Economy

Oil up 3% as Hormuz Disruption Outweighs UAE OPEC Exit

Published

2 hours ago

29/04/2026

Adedapo Adesanya

By Adedapo Adesanya

Oil was up by nearly 3 per cent on Tuesday as persistent worries about supply constraints from the closed Strait of Hormuz continued, with Brent futures for June rising by $3.03 or 2.8 per cent to $111.26 a barrel, and the US West Texas Intermediate (WTI) crude futures growing by $3.56 or 3.7 per cent to $99.93 a barrel.

An earlier round of negotiations between the United States and Iran collapsed last week after face-to-face talks failed.

Ship-tracking data showed significant disruptions in the region, with six Iranian oil tankers forced to turn back due to the US blockade, but some traffic is still moving.

Prices trimmed some of the advances after the United Arab Emirates (UAE), the fourth-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it would exit the group on this Friday, May 1, 2026.

This dealt a blow to the oil-exporting group and its de facto leader, Saudi Arabia.

The UAE could quickly ⁠add between 1 million and 1.5 million barrels per day of output. However, with the Strait of Hormuz effectively closed, analysts said that there’s nowhere for that supply to go.

The UAE joined OPEC in 1967, but tension with Saudi Arabia over production quotas has been building for years.

Under the OPEC+ deal, the country has been held to roughly 3 million barrels per day while sitting on capacity above 4 million. It has been pushing toward 5 million barrels per day by 2027, and that target is hard to achieve with quotas built around someone else’s view of the market.

The war in Yemen broke whatever was left of diplomatic patience.

President Donald Trump said he was unhappy with the latest Iranian proposal to end the war. The proposal would avoid addressing the nuclear programme until hostilities cease and Gulf shipping disputes are resolved.

The Idemitsu Maru, ‌a Panama-flagged ⁠tanker carrying 2 million barrels of Saudi oil, and an LNG tanker managed by the Abu Dhabi National Oil Company (ADNOC) crossed the Strait on Tuesday, shipping data showed.

Vortexa data showed that the amount of crude oil held around the world on tankers that have been stationary for at least seven days rose to 153.11 million barrels as of April 24.

The American Petroleum Institute (API) estimated that crude oil inventories in the United States fell by 1.79 million barrels in the week ending April 24. The official data from the US Energy Information Administration (EIA) will be released later on Wednesday.