Nigerian Stocks Gain N300 billion In Two Weeks As MMM Freezes
Unbeknownst to a lot of Nigerians who loathe the stock market, the Nigerian stock market is staging a massive rally this December that has seen the market gain for 9 straight days out of 10, the best since March 2016. This is happening at a time when popular ponzi scheme has been frozen for a month to stem the spate of withdrawals amidst slowing contributions.
Nigerians have relied on fast money-making schemes such as MMM to help mitigate the rising cost of goods and services and the lack of businesses and investments that can provide decent profits. With over 3 million partaking actively in MMM, the scheme has left stocks and other traditional investments in its wake.
However, within this period investments like treasury bills and bonds, which are by far safer have attracted higher yields for investors. Some stocks have also returned over 100% within the last 4 weeks alone as renewed sentiments buoy investor appetite in the Nigerian stock market. For example, Forte Oil has risen by over 100% in the last 10 days alone, gaining nearly 10% every day.
Stocks are still considered risky business by most Nigerians and will rather keep their money under their pillow. MMM has however showed that Nigerians still have huge appetite for risk provided that the investment can generate good returns, transparent and easy to understand despite the perceived risk. It is unlikely that people will now shift to stocks as the next big thing, however the Nigerian stock exchange could do much more to fill that vacuum for Nigerians looking for good quality stocks they can invest in.