The National Pension Commission (PenCom) has released data indicating a significant upswing in the pension industry’s Net Asset Value within the Nigerian stock market, reaching N1.39 trillion by the close of September 2023. This remarkable surge represents an impressive increase of N478.8 billion compared to the N908 billion reported at the beginning of the year.
In essence, Pension Fund Administrators (PFAs) managed to elevate the value of their holdings in the local bourse by a substantial 53% over the course of the nine-month period, buoyed by a bullish performance in the stock market.
This upward trajectory was closely aligned with the All-share index, which witnessed a robust gain of 29.52% during the same period, largely attributable to institutional local investors who actively participated in the market.
The ascendancy of the pension industry’s exposure in the stock market was further mirrored by the performance of the NGX Pension Index, which displayed an impressive rally of 58.9% and culminated the period at a solid 2,848.38 index points.
It’s worth noting that the Nigerian pension industry has been experiencing remarkable growth in recent years, a result of numerous regulatory reforms initiated by PenCom. These reforms have led to a decrease in the number of PFAs in the industry, driven by mergers and acquisitions.
The overall assets of the industry underwent remarkable growth in the initial nine months of the year, accumulating a substantial N2.36 trillion. This propelled the total assets to an impressive N17.35 trillion by the close of September 2023, marking a remarkable 15.7% increase when compared to the N14.99 trillion recorded at the end of December of the previous year.
Other Notable Highlights
- Investments in foreign stocks surged by 41% year-to-date as of September 2023, reaching N153.68 billion, up from N108.99 billion at the start of the year.
- Federal government (FGN) securities, which constitute a significant portion of the pension assets, experienced a 17% growth year-to-date, reaching N11.31 trillion, while corporate debt securities expanded by 12% to reach N195.79 billion.
- Conversely, assets in money market instruments faced a 17% decline, falling to N1.64 trillion from the N1.98 trillion reported at the end of December 2022.
- Real estate investments saw a modest 1% increase, reaching N219.79 billion as of the reference period.
- In terms of fund categories, Fund I exhibited the most substantial growth, surging by 78% year-to-date to reach N132.6 billion. Despite being the smallest category, Fund V also demonstrated noteworthy growth, expanding by 50% to reach N561.8 million.
The positive trend in PFA assets within the NGX suggests a promising outlook for pension fund managers and the Nigerian stock market, provided economic stability and prudent investment strategies are maintained.
