In the past six weeks we have seen two major policy changes that are of enormous value to Nigerian investors. One is the removal of fuel subsidies, the other is the liberalisation of the foreign exchange regime with the aim of unifying Naira/US$ exchange rates. These present excellent investment opportunities.

We believe that foreign exchange liberalisation brings benefits to Nigerian equity investors and will encourage foreign investors to bring money into the country again. The long-term declines in both foreign direct investment (FDI) and foreign portfolio investments (FPI) are set to be reversed, in our view. Within the equity market we favour the bank sector. Banks not only tend to hold net long positions in US dollars but are also beneficiaries of liberalised FX trading and the increased liquidity that implies.

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