• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

Nigeria’s Falling Yield could lead to shift in Investment Strategy

Uche Ndimele by Uche Ndimele
November 6, 2017
in Blurb, Markets, Spotlight
Nigeria Stock Exchange extends full suspension of Oando Plc shares

Oscar Onyema, Chief Executive Officer, Nigerian Stock Exchange

Share on FacebookShare on TwitterShare on Linkedin

Traditionally, investors’ appetite and need for income comes from fixed income instruments like treasury bills and bonds. Until recently, 10-year Nigeria treasuries have delivered an average yield in the upwards of 15% thereby providing a high level of income to investors with a relatively minimal level of risk. However, current economic events are giving rise to low interest rates.

Yield curves have been falling across all tenors. The 10-year yield fell by 6% between January and October while the 20-year yield decreased by 8% to 15.07% and 14.74% respectively. Granting that yields move in the opposite direction of prices, this trend implies that the prices of fixed income instruments are trending upwards indicating that people are buying more and more of FGN and other bonds. This also implies that the government may be able to issue T-Bills or refinance maturing bonds at cheaper rates.

RelatedStories

NGX

Nigerian Stocks post solid gains as January ends in green 

February 2, 2025
NGX

Eight Nigerian stocks soar to triple-digit YtD gains as of August 2024 

September 3, 2024

Credit:Quantitative Financial Analytics

One effect of the decreasing yield is that it is creating a gap between investors’ income needs and the income usually provided by traditional fixed income investments.

Source: Quantitative Financial Analytics

With bond yields trending low these days, investors could be forced to change their investment strategy away from traditional fixed income instruments to high yield dividend stocks. The advantage of such strategy change is that such strategies can deliver both the high yields required to meet their current income needs as well as the opportunities to grow their principal. Unfortunately, the Nigerian market does not boast of a sizable number of high dividend yield stocks.

Currently, only 3 stocks have dividend yields that are better than what traditional fixed income instruments provide. While Smart Products Nigeria plc and RAK Unity Pet company have dividend yield of 42% and 20% respectively, United Capital plc and Zenith International Bank plc have 16.29% and 14.7% respectively.  The seeming dearth in the existence of high dividend yield stocks could be as a result of the increase in stock prices in recent months.

The relationship between stock prices and dividend yield is such that as stock prices increase, dividend yield decreases. That notwithstanding, those with keen eyes on the market may be able to uncover the stocks that could bridge the income gap being created by the falling trend in yields.

Source: Quantitative Financial Analytics

 

Tags: Fixed IncomeNigerian StocksYields
Uche Ndimele

Uche Ndimele

Uchenna Ndimele is the President of Quantitative Financial Analytics Ltd. MutualfundsAfrica.com and mutualfundsnigeria.com (both Quantitative Financial Analytics company website) is a leader in supplying mutual fund information, analysis, and commentary on African mutual funds. We provide reliable fund data; and ratings information that will add value to fund managers, the media, individual investors and investment clubs.

Related Posts

NGX
Equities

Nigerian Stocks post solid gains as January ends in green 

February 2, 2025
NGX
Equities

Eight Nigerian stocks soar to triple-digit YtD gains as of August 2024 

September 3, 2024
Nigerian Stock Exchange
Markets

Nigerian Stocks lose N334 billion in market cap as bears takeover July 

July 15, 2024
NGX
Equities

Nigerian stocks you can invest in H2’2024 – Investment analysts  

July 3, 2024
NGX
Dividends

Nigerian Stocks with the best dividend yield 2024

July 1, 2024
Dollars
Currencies

FX spot market posts $4.03 billion turnover in January -Report

March 6, 2024
Next Post
How to open a Pension Account

PTAD to recover N25 billion legacy pension funds from 9 life insurance companies

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • Nigeria’s oil production falls to 1.45m bpd in May 2025 – NUPRC  
  • FG seeks UN intervention amid Israel-Iran conflict escalation 
  • From Idea to Impact: What African cities can learn about building better startup ecosystems 

Follow us on social media:

Recent News

Latest crude oil price drop threatens Nigeria’s revenue and naira stability 

Nigeria’s oil production falls to 1.45m bpd in May 2025 – NUPRC  

June 14, 2025
Sterling Bank, Peerless, AfriGO, and NIBSS launch independence reward program for Nigerian service providers

FG seeks UN intervention amid Israel-Iran conflict escalation 

June 14, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics