Nigeria’s treasury bills are poised to be an attractive investment option for Nigerians in 2025, offering over 30% returns in one year present a low-risk investment option.
This was revealed by Egie Akpata, Chairman of Skymark Partners, during the Nairametrics Q4 Economic Outlook themed Nigeria Economic Outlook 2025 Focus: Exchange Rate, Interest Rate, Economic Growth, Geopolitics.
Akpata provided valuable insights into the investment landscape for 2025, outlining opportunities in fixed-income securities, equity markets, and dollar-denominated assets.
Akpata highlighted the remarkable returns on treasury bills, making them the ideal choice for low-risk investors.
“We have very high risk-free rates right now. The rates on one-year treasury bills are over 30%. Some people might be best served just investing in treasury bills only and not really bothering with anything else.”
He explained that the safety of treasury bills is a major draw, emphasizing “Given where things are now, are we likely to lose 30% in the next 12 months? Probably not.”
Opportunities in the equity markets
For investors willing to explore beyond fixed income, Akpata pointed to the banking sector as a promising area, particularly due to its dividend yields.
“There’s still a lot of value in the bank stocks just by the size of their dividends and dividend yields. That is probably something worth looking at,” he said
However, he stressed that timing is critical for equity market investments, advising investors to adopt a cautious and strategic approach.
Diversifying into dollar assets
Akpata also recommended dollar exposure for those looking to balance their portfolios. He suggested euro bonds, U.S. indices like the S&P 500, and ETFs as viable options. He noted:
“It’s always good to get dollar exposure, either via euro bond funds or, for those who are really sophisticated, investments in the US indices like the S&P index or ETFs,” he stated.
What you should know
Egie Akpata, also during the Nairametrics Q4 Economic Outlook analyzed the Nigerian stock market’s resilience.
- He disclosed that the market has shown resilience despite economic challenges with sectors such as banking and petroleum driving the market performance.
- The banks are benefiting from high interest rates and foreign exchange gains, while petroleum companies thrived due to price deregulation and favorable exchange rates.
Challenges persist for other listed companies. Depreciation of the naira has resulted in negative shareholders’ funds for firms like MTN and Nestle due to foreign exchange losses.