Renaissance Capital, a unit of the Russian investment bank, has said Nigerian equities market remains attractive to both local and institutional investors.

The bank has, therefore, recommended that investors who want to record profits in their investments should consider increasing their holdings in the Nigerian equities.

Rencap’s Chief Executive Officer, Mr. John Hyman, was quoted as saying these in an interview with Bloomberg on Wednesday.

He said the growth in the equities was also as a result of economic growth in the country.

“In Africa, the Nigerian equities market is the largest and most attractive market to us. We would say to any long-term investors: you should have some Nigerian shares in your portfolio,” he said.

The Nigerian Stock Exchange All-Share Index has gained 19 per cent this year, which makes it the third-best performing index behind countries such as Bulgaria and Venezuela.

According to data compiled by Bloomberg, while Nigerian stocks gained 35 per cent last year, the index has only rebounded to half the March 2008 peak it reached before the global financial crisis and a government bailout of the banking industry triggered a market slide.

The Chief Executive Officer, NSE, Mr. Oscar Onyema, has announced that the equities market is targeting a market value of $1tn by 2016 as state power companies are on the verge of being sold to bidders, including Siemens AG, Korea Electric Power Corporation.

“Power industry reform will add to the economic growth, while the Islamist insurgency in Nigeria is a “manageable” risk, and we think the growth rate continues to be attractive, valuations continue to be relatively attractive. The pace of reform is good,” Hyman said.

Nigeria’s economy, which is estimated at $272.6bn by the International Monetary Fund, is expected to grow by 6.5 per cent this year, the same it did last year, according to the national budget presented by President Goodluck Jonathan to lawmakers in October.

The market capitalisation of NSE currently stands at $67.5bn, according to data compiled by Bloomberg.

The outlook for the rest of sub-Saharan Africa also looked promising for investors, with key indicators on reform, governance and literacy showing improvement and violence declining, Hyman said.

The Bloomberg NSE Banking Index, which tracks the performance of Nigeria’s 10 largest lenders, has advanced by 24 per cent this year, while an index following the West African nation’s 10 biggest consumer goods companies has climbed by 17 per cent.

RenCap, which does not disclose detailed financial results, began operations in sub-Saharan Africa in 2006.

Source: Punch