Pension Fund Administrators (PFAs) exposure in the stock market and FGN Bonds, among other securities, added N856biiion in the first half of 2024, contributing to the industry’s overall assets.
The added N856.39 billion is coming on the backdrop of macroeconomy challenges that include double-digit inflation, unstable naira at the foreign exchange, hike in Central Bank of Nigeria’s (CBN) monetary policies, among others.
The sector regulator licensed three custodians and 19 administrators to manage pension funds in Nigeria.
According to the National Pension Commission (PenCom), FGN Securities comprise FGN Bonds (HTM), Nigerian Treasury Bills (NTBs), Agency Bonds (NMRC), Sukuk Bonds and Green Bonds and data from the commission showed that PFAs’ investment in FGN Bonds opened in January 2024 at N12.14 trillion, gained N820.32 billion to close June 2024 at N12.96 trillion, while exposure in the domestic equities market stood at N1.97 trillion as of June 2024, an increase of N36.07 billion from N1.93 trillion reported January 2024.
Analysts stated that PFAs lately divested into FGN securities over a steady increase in the Monetary Policy Rate (MPR) as the apex bank sustained its stance in tackling inflationary pressure and stable naira at the foreign exchange market.
In the review period, the stock market gained N15.6 trillion in market capitalisation and 33.8 per cent in NGX ASI as investors aggressively invested in cheaper and fundamental stocks quoted on Nigerian Exchange Limited (NGX).
