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What Warren Buffet will do if he traded Nigerian stocks

Warren Buffett bought $5 billion investment in the Bank of America which expanded to $12 billion in 2017, gaining a whopping $7 billion.



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In 2011, Warren Buffett invested $5 billion in the Bank of America. On October 9, Bank of America CEO, Brian Moynihan was discussing this investment on the David Rubenstein Show. In 2011, Bank of America’s financial health deteriorated after the global financial crisis.

However, Buffett bought preferred stock in the bank. In 2017, that $5 billion investment expanded to $12 billion, gaining a whopping $7 billion.

A similar situation that happened in America about a decade ago is taking it to shape in the Nigerian Stock Exchange as the dividend yield on the Nigerian equities market has in recent times continued to increase as a result of the persistent free-fall in equity prices owing to a bouquet of factors.

The global Coronavirus pandemic has further strengthened the panic selloffs in the local and foreign financial markets.

[READ MORE: Here’s what Warren Buffet thinks parents should teach their kids about money)

The impact of the virus seems heavy, killing more stock markets and economy than people across the globe, sending panic waves around the world, more devastating than the financial meltdown of 2008.

Nigeria @59: Rise, fall & rise of Nigerian stock market 

Nigerian stocks hit new lows as the Nigerian ASI Index hit a new 11-year low on a huge traded volume that suggests that investors are dumping their shares, in their desperate bid to cut their losses.

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So far, the Nigerian market has lost all of 13% in just four trading sessions of the week, just as over N1.82 trillion has been shaved off the market capitalization within the same period.

Meanwhile, with the resultant fall in the price of crude oil at the international market, the Nigerian economy is already challenging Nigeria on fiscal balancing and its recent devaluation of the naira

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 The Central Bank of Nigeria’s efforts to spur economic growth and development through the low-interest rate regime, a situation that is first in the history of Nigeria, even as the lack of investor protection and corporate governance are hurting the market.

READ MORE: Another crushing recession ‘is coming’

The prolonged market downturn has, however, boosted yield, especially of blue-chip stocks and other dividend-paying equities across the different sectors of the market. Banking and other financial services stocks are powerhouses of any economy, just as they are intermediaries and agents of development.

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Dividend investing has become necessary in the post-general election Nigerian stock market.

That has been characterized by a free-fall in equity prices, which has eroded investors’ capital and confidence in the entire economy due to weak macro-economic indices and a lack of development and growth-stimulating policies from the government to offer the much-needed direction.

The Dividend Yield at any time measures how much cash flow you as an investor are getting for every Naira invested in a company’s equity. It also tells what percentage of net profit a company pays out in the form of dividends. This is one of the main factors you need to consider when investing in dividend-paying stocks.

It’s expected that there will be a slowdown on the losing momentum as low prices of stocks and high dividend yields attract buying interest that cannot be resisted by smart money, as more audited corporate earnings hit the market, going forward.

[READ ALSO: Why Warren Buffet’s $4.6m lunch with Bitcoin entrepreneur is experiencing delay)

This is despite the likely continuation of the mixed intraday movement in the midst of selloffs, with investors buying increasing positions in undervalued stocks ahead of dividend declaration.

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This is also against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market, high inflation and unstable economic outlook for 2020.

Nigeria top tier one banks like ZENITH, GUARANTY, UBA, FBNH, ACCESS look attractive based on their recent Price book ratio and dividend yield.

However, it’s very important to seek a certified financial advisor or licensed stockbroker, when picking stocks for investments, as unprofessional advice can erode your capital or savings.


Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Business News

NCC discloses application requirements for Proof of Concept trial license

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.



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The National Communications Commission (NCC) has released application requirements for trial frequencies in certain spectrum brands under the Proof of Concept (POC) Trial license.

This was disclosed on Wednesday, April 14, 2021, in a statement signed by the Director of Public Affairs, Dr Ikechukwu Adinde; and made public on the Commission’s verified Twitter account, @NgComCommission.

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

The requirements listed by the NCC include:

  • The PoC trial license application must only be granted to Original Equipment Manufacturers(OEMS)/Vendors, or operators in conjunction with their Original Equipment Manufacturers.
  • PoC trial shall not exceed a period of three months effective from the date of approval.
  • Equipment for Proof of Concept must be ‘Type-approved’ by the Commission.
  • Appropriate Spectrum fees must be paid in accordance with the NCC’s regulations.

In case you missed it

Nairametrics reported that Nigerian telco giant MTN recently announced its acquisition of an additional 10MHZ spectrum in the 800MHz band from Intercellular Nigeria Limited.

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Business News

Lagos State residents paid highest price for petrol in March 2021 – NBS

The NBS revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020.



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The National Bureau of Statistics (NBS) has revealed that Lagos State residents paid the highest average price for petrol in the country, in the month of March 2021, at N200.87 per litre; while Adamawa state residents paid the lowest average price in the month of March at N162.17 per litre.

The NBS also revealed that the National Average price/litre of petrol was N172.68 in March 2021 compared to N145.40 in March 2020 and N166.24 in February 2021.

This was disclosed in a report by the NBS CEO, Dr. Yemi Kale, yesterday, April 14, 2021, via his verified Twitter account @sgyemikale.

On kerosene the NBS said:

  • National Average Price/litre at N361.29 in March 2020.
  • The states with the highest average were Taraba (N466.67), Ebonyi ( N450) and Benue (N448).
  • The States with the lowest average prices were Bayelsa (N250), Yobe (N296.43) and Katsina (N318.33)

On Premium Motor Spirit (petrol):

  • National Average price/litre at N172.68 in March 2020
  • The states with the highest average were Lagos (N200.87), Ebonyi (N184.17) and Niger (N183.50)
  • The states with the lowest average prices were Adamawa (N162.17), Taraba (N162.67) and Bauchi (N164).

What you should know 

Recall that Nairametrics reported that the federal government has suspended plans to end its subsidy payments as reports indicate that the FG plans to spend N720 billion for the next 6 months on Premium Motor Spirit (PMS) subsidies.

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