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

Nigerian Stocks Chalk up 0.33% on Positive Market Breadth Index

Published

1 hour ago

09/06/2026

Dipo Olowookere

By Dipo Olowookere

Renewed buying interest raised the Nigerian Exchange (NGX) Limited by 0.33 per cent on Monday, with gains recorded in almost all the major sectors of the bourse at the close of transactions.

According to data harvested by Business Post, the insurance counter expanded by 0.62 per cent, the banking index grew by 0.59 per cent, the energy sector appreciated by 0.40 per cent, and the consumer goods space improved by 0.10 per cent, while the industrial goods segment closed flat.

When the closing gong was struck by 4 pm to signify the close of business on Customs Street, the All-Share Index (ASI) was up by 1,113.76 points to 243,707.07 points from 242,593.31 points, and the market capitalisation chalked up N714 billion to close at N156.308 trillion compared with the previous session’s N155.594 trillion.

Interest in Nigerian stocks yesterday resulted in a rise in the activity level, with the trading volume soaring by 17.86 per cent to 717.2 million units from 608.5 million units. The trading value advanced by 77.19 per cent to N56.7 billion from N32.0 billion, and the number of deals surged by 36.22 per cent to 73,321 deals from 53,826 deals.

FCMB was the busiest stock during the trading day, with a turnover of 152.3 million units worth N1.8 billion, Premier Paints exchanged 61.0 million units valued at N135.3 million, Dangote Cement traded 34.7 million units for N29.7 billion, The Initiates sold 32.8 million units worth N1.0 billion, and Jaiz Bank transacted 32.6 million units valued at N293.3 million.

Yesterday, the market breadth index was positive after the exchange closed with 37 price gainers and 28 price losers, representing strong investor sentiment.

International Energy Insurance gained 9.92 per cent to settle at N7.98, the Initiates added 9.91 per cent to its share price to quote at N32.15, ABC Transport garnered 9.68 per cent to trade at N6.80, Abbey Mortgage Bank grew by 9.63 per cent to close at N10.25, and Linkage Assurance soared by 9.36 per cent to N1.87.

On the flip side, Fidson Healthcare gave up 10.00 per cent to finish at N122.85, Academy Press crashed by 9.70 per cent to N7.45, RT Briscoe depreciated by 9.43 per cent to N13.45, SUNU Assurances tumbled by 9.37 per cent to N4.06, and Learn Africa decreased by 8.70 per cent to N10.50.

Economy

NASD OTC Exchange Opens Week Lower as Valuation Dips N1.27bn

Published

1 hour ago

09/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a marginal 0.05 per cent drop on Monday, June 8, depleting the market capitalisation by N1.27 billion to N2.606 trillion from N2.607 trillion, and cutting the Unlisted Security Index (NSI) by 2.12 points to 4,356.20 points from the previous 4,358.32 points.

The contraction witnessed during the session was triggered by a price loser, which overpowered that gains recorded by two securities on the trading platform.

Data indicated that MRS Oil Plc lost N6 at the close of business to settle at N165.00 per share compared with last Friday’s price of N171.00 per share.

Conversely, Lighthouse Financial Services Plc added 9 Kobo to sell at N1.03 per unit versus 94 Kobo per unit, and Central Securities Clearing System (CSCS) Plc appreciated by 8 Kobo to N78.48 per share from N78.40 per share.

The volume of securities traded by investors yesterday soared by 51.9 per cent to 213,188 units from 140,345 units, and the value of securities increased by 12.6 per cent to N20.2 million from N17.9 million, while the number of deals executed fell by 7.4 per cent to 25 deals from 27 deals.

Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 64.8 million units exchanged for N4.4 billion.

GNI Plc also remained as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.

Economy

Naira Loses Against Dollar Official, Black Markets

Published

4 hours ago

09/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.

At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.

At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.

However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.

Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.

On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.

Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.

Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.

Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.