Sigma Pensions sees N5trn T-bills, Bonds maturing in H2 boosts industry returns
With over N5trillion worth of maturities expected in the Treasury Bills (Tbills) and Bond Market in the second half (H2) of 2020, pension experts are positive that this will drive liquidity and boost the economy for the rest of the year.
As investors seek instruments to put funds into, Pabina Yinkere, chief investment officer(cio) Sigma Pensions, who disclosed this during Webinar organized by the Pension Fund Administrator(pfa) spoke extensively on the investment climate in Nigeria, Impact of Covid-19 on Pensions returns and the way forward.
Yinkere told the Company’s staff who participated at the virtual event to allay the fears of customers and assure them that Sigma Pensions investment management arm is working tirelessly to ensure they get the best returns available at these times.
He said: “If we look at treasury bills and bonds that are going to mature over now to December period is over N5trillion worth of maturities which are things that we have invested in and would be paid back to us in cash. So, to keep the investments going, we have to re-invest this into the market.
And if we look at the federal government borrowing for this year, they plan to borrow N2trillion in total. So, with N5trillion against N trillion, you can see that there would be a lot of money left for investment or if invested at all, the demand for investment would become very high and it would then affect returns going forward.”
Speaking further on the effect it would have on the stock market, he said: “If we then look at the stock market, the Nigerian stock market is highly correlated to oil prices. As we have seen decline in the oil price over this year following the advent of COVID-19, you would see that the market hasn’t done very well.”
“However, because of the share size of liquidity, there is a scope that this market would probably not decline as much as one would have expected but then what it still means is that because companies are going to be facing challenges and having troubles with growing revenue and making profit, equity investment may not be very attractive long-term opportunities at this time.”