As the U.S. Fed’s first rate increase
approaches, foreign investors in Nigeria, Africa’s largest economy, may
be set to dump stocks and bonds, a risk that most investors have yet to
come to price in.
“Foreign ownership can be a risk – more
on the bond side than the equity side. If equity investors all try to
flee a market, the price of the equities falls dramatically and
therefore the dollar value of money that may leave the market gets
smaller (as the share price gets smaller),” said Charles
Robertson, Renaissance Capital’s global chief economist, in a response
to questions.
