Despite growth in assets under management to N14.43 trillion, Pension Fund Administrators exposure to stock market and Treasury Bills dropped in August 2022 to highlight low-yield environment as inflation rate continued to diminish investment.
The federal government, through the Debt Management Office auctioned N255 billionn from three issues that included: Mar 2025, Apr 2032, and Jan 2042) with interest rate at 12.5 per cent, 13.5 per cent and 14 per cent respectively. The withdrawal of PFAs in the stock market also contributed to market deprecation in August as most fundamental stocks depreciated.
Analysts, however, projected that PFAs investment exposure in stock market to persist in fourth quarter of 2022, citing the expected rise in yields on FGN bonds and other fixed-income investments following the commencement of tight monetary policy by the Central Bank of Nigeria . “Nevertheless, our medium-long term outlook for the Nigerian stock market remains positive. This provides an opportunity for investors that want to take advantage of cheap stocks in the market at the moment,” he added.
“Attention of PFAs also shifted to the primary market for debt where FGN Bonds was active. Perhaps also, PFAs were reducing their exposure to equities, following the US Feds rate hike which threatened the global equities market.