The yield for 2022 compares with that of last year, when. It is now at least three years in a row that the Nigerian equity market will post positive returns, the biggest being 2020, when it yielded over 50 per cent as the best performing stock index in the world, according to Bloomberg ranking.
Nigeria’s foreign portfolio investment was as high as 57.5 per cent in 2014, but the bugbear of dollar scarcity has been keeping international investors at bay from the market in recent years as they fear the country’s forex crisis could make their investments difficult to redeem. But that is just one aspect of the problem.
If there were a number of put-offs for foreign investors during the year, there is a sense that involvement of local players in equity trading is expanding, with 83.3 per cent of the total trade for the year executed by Nigerians. But it is worrisome that the gulf between retail investors’ participation and that of institutional investors continued to widen. At N1.2 trillion, the latter contributed more than twice their retail counterparts accounted for.
That aggressive adjustment saw the apex bank scale up rates by 500 basis points in an unorthodox move towards curbing the country’s inflation, one of the five central banks on the continent that have increased borrowing costs by at least 5 percentage points.