-Lack of forex liquidity deters foreign investors, RMB says

-Lagos index of banking stocks has underperformed this year

Nigerian banks are some of the cheapest stocks in Africa, more evidence of how a shortage of dollars in the continent’s largest economy is discouraging foreign investors.

Four of the five African stocks with the lowest price-earnings ratios among companies valued at $500 million or more are Nigerian lenders, data compiled by Bloomberg show: United Bank for Africa Plc, Access Bank Plc, FBN Holdings Plc and Zenith Bank Plc. Johannesburg-traded steelmaker ArcelorMittal South Africa Ltd. completes the quintet.

Investors have been able to beat returns from the Lagos stock market by buying higher yielding debt sold by the government to fund its widening budget deficit. But it’s the Central Bank of Nigeria’s curbs on the repatriation of dollars that’s the biggest bugbear for foreigners and the key reason for depressed valuations, said Usoro Essien, an analyst at Rand Merchant Bank.

“The foreign exchange illiquidity has frustrated a lot of foreign investors, so the apathy is not just on banks but on the market in general,” Essien said by phone.

The West African nation’s stock market had a good 2020, climbing 50% as local pension funds barred by the state from trading in its most-lucrative short-term debt poured money into equities. That liquidity has since largely dried up and the 151-member benchmark index is down 2.3% this year, with an index of the country’s largest banks sliding 3.7% as of Monday’s close.

Domestic investors may be drawn back to the lowly valued stock market if fixed-income yields prove unattractive, but that’s unlikely to be enough of an incentive for non-residents, Essien said. “For the foreign investor, what matters most is the ability to exit at will.”

Bloomberg

Buhari's negative records continues to manifest in every sector that even a goat can do better than him. Nigeria has been destroyed beyond redemption by this heartless Junta. Only God can save us

What a low market value.. Just $500 million among 186.

Na wa oo

twosquare:
What a low market value.. Just $500 million among 186.

That's not the total stock valuation.

The companies listed have a valuation of 500million dollars or more. Which is also a VERY GOOD thing.

Especially for a tier 1 bank like Zenith bank.
The dollar availability issue is a regulatory issue and nothing to do with their financial Operations.

,

Ok

Lol Buhari adds another feather to his cap.

-Lack of forex liquidity deters foreign investors, RMB says

Nigeria our country!
Make we nor go dey carry first from behind for everything ooo

How does that affect the suffering the u.s brought against the afghans?

El Buhari the man that once had a drought named after him is a monumental disaster

El Buhari

Fahdiga:
Buhari's negative records continues to manifest in every sector that even a goat can do better than him. Nigeria has been destroyed beyond redemption by this heartless Junta. Only God can save us

Bia you dey sleep for nairaland

Who else do not understand this

Buhari is a destroyer

bgb

Buhari has finished this country for good and i blame yorubas till today.

WE HAVE A JIHADIST AS OUR PRESIDENT

Imagine

The greatest mistake in the whole of West Africa happened in 1914.

The second greatest was in 1960.

And the third?





You guessed right.....2015.

Buhari govt and those who Voted him. see Una life?

Patrioticbreed9:

Bia you dey sleep for nairaland

MALLAM FAHD AKA FAHDIGA IS A JOBLESS MAN NOW, I EVEN THINK SAY NA ONLY ME NOTICE AM

God be with us

Patrioticbreed9:

Bia you dey sleep for nairaland

Toh

Buhari & Co want to finish Nija

Cement manufactured in Nigeria is cheaper outside Nigeria

Mumusaphire:
God be with us

Leave God out of this

Bend down select stock according to Blomberg.
Oya make una rush am

OBALOLA55:
MALLAM FAHD AKA FAHDIGA IS A JOBLESS MAN NOW, I EVEN THINK SAY NA ONLY ME NOTICE AM

Abi