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Nigeria leads major global equity markets in returns on investment
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A study by Afrinvest West Africa Limited and Standards and Poors shows that as at November last year, returns from the Nigerian market was the highest among African and Middle East emerging markets with the exception of Zimbabwe. According to the report, investors made 63.3 percent from the Nigerian market, behind Zimbabwe with 93.4 percent and China 82.1 percent, although the Nigerian score notched up to 74.7 percent by year end.
Returns from Brazil was 41.7 percent , Russia 6.6 percent, India 47.8 percent Standard and Poors 500 4.4 percent, FTSE100 3.4 percent , Egypt 39.7 percent, Saudi Arabia 19.3 percent and South Africa 21.6 percent and United Arab Emirates 38.8 percent.
“Nigeria offered the highest returns among Middle-Eastern and African emerging market peers, except for Zimbabwe (driven by hyper-inflation). By November 2007, the benchmark Nigerian Stock Exchange (NSE) Index was up
63.3 percent, and 74.7 percent by year end 2007. However, Nigerian equities outperformed stocks in the U.S, U.K, Turkey and even Russia”, the study said.
In another report by Exotix Limited, a UK based emerging markets specialist investment banking firm, which put the returns from the Nigerian Stock market at 91 percent at the end of the 2007 compared with South Africa’s 19 percent even as the local capital market contributed only 7.6 percent to the economy. The South African Bourse on the other hand accounted for 87.8 percent, Exotix said.
Some of the companies that contributed to the returns from the Nigerian Stock Market, include growth stocks like First Bank, Intercontinental Bank, United Bank, Zenith Bank, Oceanic Bank, Dangote Sugar, Bank PHB, Nestle and some insurance companies like Continental Reinsurance, Custodian and Allied Insurance, Staco Insurance and Intercontinental Energy Insurance.
The study shows that South Africa’s huge market capitalization of $857.4 billion compares with Nigeria’s meagre $74.7 billion. Investment recovery period from South Africa’s stocks is 18 times as against Nigeria’s 31.1. While dividend yield in Nigeria was 1.5 percent, South Africa has dividend yield of 1.7 percent.
Exotix’s research however showed that the Tanzanian stock market recorded the highest return of 290 percent in 2007, a leap from two percent in 2007, followed by 119 percent and Malawi with 111.9 percent , an increase from 14 2 percent in 2006.
Ugandan stock market ended the year with the highest dividend yield of 11.6 percent followed by Mozambique’s 9.5 percent and Kenya’s 2.8 percent.
Out of $967.4 billion capitalization in Africa, Sub Saharan Africa contributed 119.0 percent while the sub regional stock market accounted for 12. percent of the African economy.
Ike Chioke , deputy managing director of Afrinvest West Africa said the 7.6 percent contribution of the capital market to the economy is a mere statistics, as a lot of activities go on in the market that may not have been captured.
Analysts believe that Nigerian market still has good prospects in 2008. The International Monetary Fund projects economic growth rate of eight percent in the new year and Ndi Okereke-Onyiuke , director general of the Nigerian Stock Exchange expressed confident that the growth trend in 2007 would be sustained .
Onyiuke’s optimism was based on the ongoing consolidation in the financial sector which is expected to compel more companies come to the market for fresh funds. At her 2007 market review, Onyiuke noted,” we are confident that the current growth trend in the market would be sustained in the new year.
“The primary market promises to be busy during 2008, as insurance companies move to consolidate merger arrangements and expand capacity”.
Fola Fagbule, head of research in Afrinvest foresees international capital flight from developed and other emerging markets to Nigeria , but warns that this would depend on foreign investors’ risk appetite.
Returns from Brazil was 41.7 percent , Russia 6.6 percent, India 47.8 percent Standard and Poors 500 4.4 percent, FTSE100 3.4 percent , Egypt 39.7 percent, Saudi Arabia 19.3 percent and South Africa 21.6 percent and United Arab Emirates 38.8 percent.
“Nigeria offered the highest returns among Middle-Eastern and African emerging market peers, except for Zimbabwe (driven by hyper-inflation). By November 2007, the benchmark Nigerian Stock Exchange (NSE) Index was up
63.3 percent, and 74.7 percent by year end 2007. However, Nigerian equities outperformed stocks in the U.S, U.K, Turkey and even Russia”, the study said.
In another report by Exotix Limited, a UK based emerging markets specialist investment banking firm, which put the returns from the Nigerian Stock market at 91 percent at the end of the 2007 compared with South Africa’s 19 percent even as the local capital market contributed only 7.6 percent to the economy. The South African Bourse on the other hand accounted for 87.8 percent, Exotix said.
Some of the companies that contributed to the returns from the Nigerian Stock Market, include growth stocks like First Bank, Intercontinental Bank, United Bank, Zenith Bank, Oceanic Bank, Dangote Sugar, Bank PHB, Nestle and some insurance companies like Continental Reinsurance, Custodian and Allied Insurance, Staco Insurance and Intercontinental Energy Insurance.
The study shows that South Africa’s huge market capitalization of $857.4 billion compares with Nigeria’s meagre $74.7 billion. Investment recovery period from South Africa’s stocks is 18 times as against Nigeria’s 31.1. While dividend yield in Nigeria was 1.5 percent, South Africa has dividend yield of 1.7 percent.
Exotix’s research however showed that the Tanzanian stock market recorded the highest return of 290 percent in 2007, a leap from two percent in 2007, followed by 119 percent and Malawi with 111.9 percent , an increase from 14 2 percent in 2006.
Ugandan stock market ended the year with the highest dividend yield of 11.6 percent followed by Mozambique’s 9.5 percent and Kenya’s 2.8 percent.
Out of $967.4 billion capitalization in Africa, Sub Saharan Africa contributed 119.0 percent while the sub regional stock market accounted for 12. percent of the African economy.
Ike Chioke , deputy managing director of Afrinvest West Africa said the 7.6 percent contribution of the capital market to the economy is a mere statistics, as a lot of activities go on in the market that may not have been captured.
Analysts believe that Nigerian market still has good prospects in 2008. The International Monetary Fund projects economic growth rate of eight percent in the new year and Ndi Okereke-Onyiuke , director general of the Nigerian Stock Exchange expressed confident that the growth trend in 2007 would be sustained .
Onyiuke’s optimism was based on the ongoing consolidation in the financial sector which is expected to compel more companies come to the market for fresh funds. At her 2007 market review, Onyiuke noted,” we are confident that the current growth trend in the market would be sustained in the new year.
“The primary market promises to be busy during 2008, as insurance companies move to consolidate merger arrangements and expand capacity”.
Fola Fagbule, head of research in Afrinvest foresees international capital flight from developed and other emerging markets to Nigeria , but warns that this would depend on foreign investors’ risk appetite.
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