PFAs Deepen Market Play: Stock & NTB Investments Surge 48% to ₦3.35 Trillion
— Riding the Waves of Attractive Returns and Macroeconomic Repositioning
Overview:
Nigeria’s Pension Fund Administrators (PFAs) are deepening their exposure to the capital market — with combined investments in domestic stocks and Treasury Bills (NTBs) rising by 48.04% YoY, reaching ₦3.35 trillion in May 2025, compared to ₦2.26 trillion in May 2024, according to data from PenCom.
This strategic pivot is fueled by the quest for attractive returns amid changing macroeconomic tides and strong corporate earnings on the NGX.
Key Highlights at a Glance:
Stock Market Exposure:
• Up 45.1% YoY to ₦2.75 trillion (May 2025) from ₦1.89 trillion (May 2024)
Treasury Bills (NTBs):
• Up 63.35% YoY to ₦604.6 billion, from ₦370.1 billion
Total Pension Net Asset Value (NAV):
• Now ₦24.11 trillion (up 19.2% or ₦3.88 trillion YoY)
Contribution to Pension Portfolio:
• Stocks & NTBs now form 13.9% of total pension assets
Why PFAs Are Repositioning:
✅ Attractive Yields
• NTBs now offer over 20% returns in one-year auctions — highly competitive in today’s inflationary environment.
✅ Strong Corporate Earnings on NGX
• Listed companies are bouncing back with strong Q1 2025 performance and improved profit outlooks.
✅ Stable Macroeconomic Signals
• Inflation eased to 22.97%, and GDP growth projections were revised upward.
• The CBN’s monetary tightening (MPR at 27.5%) and FX stability under Dr. Cardoso restored confidence.
✅ Market Opportunity
• Many fundamentally sound stocks became undervalued due to extended market repricing — an opportunity PFAs could no longer ignore.
What Experts Are Saying:
Tajudeen Olayinka (Investment Banker & Stockbroker):
“Prices had become too low to resist… companies adjusted to cost variability and positioned early for year-end rallies.”
David Adnori (VP, Highcap Securities):
“PFAs operate under strict regulation… diversification is key. Their strategy balances risk and aims to preserve contributor wealth long term.”
Market Impact So Far:
✅ PFAs’ activity helped push NGX market capitalization up by ₦7.7 trillion in the first 5 months of 2025 — a 12.3% growth from ₦62.76 trillion in December 2024.
Investor Takeaway:
The aggressive move by PFAs into stocks and NTBs signals a renewed confidence in Nigeria’s economic fundamentals. It also suggests that domestic institutional investors are actively hedging inflation while capitalizing on yield and undervaluation.
For retail investors, this is a strong cue to:
• Reassess your portfolio exposure
• Pay attention to undervalued quality stocks
• Keep an eye on NTB auctions and fixed-income yields
— Riding the Waves of Attractive Returns and Macroeconomic Repositioning
Overview:
Nigeria’s Pension Fund Administrators (PFAs) are deepening their exposure to the capital market — with combined investments in domestic stocks and Treasury Bills (NTBs) rising by 48.04% YoY, reaching ₦3.35 trillion in May 2025, compared to ₦2.26 trillion in May 2024, according to data from PenCom.
This strategic pivot is fueled by the quest for attractive returns amid changing macroeconomic tides and strong corporate earnings on the NGX.
Key Highlights at a Glance:
Stock Market Exposure:
• Up 45.1% YoY to ₦2.75 trillion (May 2025) from ₦1.89 trillion (May 2024)
Treasury Bills (NTBs):
• Up 63.35% YoY to ₦604.6 billion, from ₦370.1 billion
Total Pension Net Asset Value (NAV):
• Now ₦24.11 trillion (up 19.2% or ₦3.88 trillion YoY)
Contribution to Pension Portfolio:
• Stocks & NTBs now form 13.9% of total pension assets
Why PFAs Are Repositioning:
✅ Attractive Yields
• NTBs now offer over 20% returns in one-year auctions — highly competitive in today’s inflationary environment.
✅ Strong Corporate Earnings on NGX
• Listed companies are bouncing back with strong Q1 2025 performance and improved profit outlooks.
✅ Stable Macroeconomic Signals
• Inflation eased to 22.97%, and GDP growth projections were revised upward.
• The CBN’s monetary tightening (MPR at 27.5%) and FX stability under Dr. Cardoso restored confidence.
✅ Market Opportunity
• Many fundamentally sound stocks became undervalued due to extended market repricing — an opportunity PFAs could no longer ignore.
What Experts Are Saying:
Tajudeen Olayinka (Investment Banker & Stockbroker):
“Prices had become too low to resist… companies adjusted to cost variability and positioned early for year-end rallies.”
David Adnori (VP, Highcap Securities):
“PFAs operate under strict regulation… diversification is key. Their strategy balances risk and aims to preserve contributor wealth long term.”
Market Impact So Far:
✅ PFAs’ activity helped push NGX market capitalization up by ₦7.7 trillion in the first 5 months of 2025 — a 12.3% growth from ₦62.76 trillion in December 2024.
Investor Takeaway:
The aggressive move by PFAs into stocks and NTBs signals a renewed confidence in Nigeria’s economic fundamentals. It also suggests that domestic institutional investors are actively hedging inflation while capitalizing on yield and undervaluation.
For retail investors, this is a strong cue to:
• Reassess your portfolio exposure
• Pay attention to undervalued quality stocks
• Keep an eye on NTB auctions and fixed-income yields