The Net Asset Value (NAV) of equities in the investment portfolios managed by Pension Fund Administrators (PFAs) has increased by 36.6% to N1.460 trillion by the conclusion of the first half of 2023 (HI'23), compared to N1.069 trillion during the corresponding period of 2022 (H1'22). Additionally, the NAV of their investments in Federal Government Bonds (FGN Bonds) experienced a 20.6% growth, reaching N10.858 trillion from N9.007 trillion in H1'22.

In the meantime, the FGN Bond auction for this month garnered a combined subscription amounting to N312.56 billion, as indicated by the figures disclosed by the Debt Management Office (DMO).

The acceleration in the growth of Pension Fund Administrators' (PFAs) assets within the equities realm has been attributed to the heightened yields within the equities market by investment experts.

Nevertheless, these experts have suggested that due to the consistent elevation of interest rates by the Central Bank of Nigeria (CBN) through the Monetary Policy Rate (MPR), there is a substantial likelihood that financial investment managers might generally transition towards higher yielding debt instruments during the latter half of the year, H2'23.

Mallam Garba Kurfi, Chief Executive Officer of APT Securities and Funds Limited, weighed in on the situation, stating, "Investment in equities gained traction due to rising inflation rates, causing Fixed Income investments to yield negative returns. However, the landscape may change in H2'23, as equities yields decline and debt instrument returns increase due to the continuous elevation of the MPR."

Regarding this month's FGN Bond subscription, the Debt Management Office (DMO) remarked, "Despite prevailing market conditions, the Auction received a combined subscription of ₦312.56 billion."

The DMO conducted the FGN Bond Auction for August amid monetary policy tightening and prevailing uncertainties.

At the Auction, four instruments (14.55% FGN April 2029, 14.70% FGN June 2033, 15.45% FGN June 2038, and 15.70% FGN June 2053) were made available to investors, with each instrument having a bid size of ₦90 billion.

The DMO disclosed that there continues to be robust investor interest in the 15.70% FGN June 2053 (30-year Bond), evidenced by a bid-to-cover ratio of 2.71 times.

Successful bidders were allocated a total of N227.76 billion for the four (4) instruments.

The DMO indicated that the allotments were made as follows: 13.85% for the 14.55% FGN April 2029, 15.00% for the 14.70% FGN June 2033, 15.20% for the 15.45% FGN June 2038, and 15.85% for the 15.70% FGN June 2053.