Nigerian equities can give good returns – Report | Dailytrust

Nigerian equities can give good returns – Report

The Managing Director/Chief Executive Officer of Coronation Asset Management, Aigbovbioise AigImoukhuede, has said Nigeria-listed equities, if properly selected, can deliver an adequate return to investors over the long term.

He made the disclosure at a virtual media engagement by Coronation Research at the weekend ahead of the release of a new report, ‘Equities for a Superior Return.’

This report, which was written by Guy Czartoryski and Adebayo Adebanjo, challenges the widely-held opinions about Nigerian investments, in particular views about the equity market.

As Nigerian investors face a third successive year of T-bill rates well below the rate of inflation, Coronation Research asks: “Which Nigerian investments beat inflation over the long term?” The surprising answer to this question is: “Equities”.

Coronation Research has studied equity returns during the period from January 1, 2016, until now. While the performance of the NGX All-Share Index was not strong, the performance of a selection of the most profitable NGX-listed companies has provided superior and inflation-beating returns.

According to Czartoryski, “The return of the NGX All-Share Index from 1 January 2016 to 30 September 2021 was 40.50% or a compound annual growth rate (CAGR) of 6.15%. With gross dividends reinvested, that rose to a CAGR of 12.44%.

“But neither return would have beaten inflation over the same period, which averaged 14.26% per annum.

“However, a basket of 10 NGX-listed companies, each with a long-term and sustainable Return on Equity (RoE) of 20.5% or more, would have delivered an investment return with a CAGR of 16.36% from 1 January 2016 to 30 September 2021. With dividends reinvested, this would have risen to a compound annual growth rate of 24.71%.”

Dear Reader,
Every day, we work hard to provide readers such as you with the most accurate, up-to-date, and comprehensive information. Quality journalism costs money. Today, we're asking that you support us to do more. Your support means that Daily Trust can keep offering journalism to everyone in the world. Sign up for as little as N1,000 to become a member. Learn more about our membership here

Bank transfers can be made to:
Zenith Bank
Media Trust Ltd

Please send details of your bank transfer to the email or Whatsapp number below so that we can contact you.

If you have any questions, please let us know.

Whatsapp: +234 806 990 3410