Retail investors pile into stock market despite weaker purchasing power

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In the first quarter of 2024, despite facing accelerating inflation, which has eroded purchasing power, retail investors poured N670.89 billion into stocks, marking a substantial increase from N123.28 billion in the same period in 2023, according to data from the Nigerian Stock Exchange (NGX).

This trend of heightened retail investment comes at a time when Nigeria is grappling with skyrocketing inflation rates, reaching a 28-year high of 33.2% in March, marking the 15th consecutive month of acceleration. Despite the economic challenges posed by inflation, individuals like Banjo Otuniyi, a digital marketer in Lagos, are increasingly turning to stocks for potentially higher returns. Otuniyi cited his increased investment activity in 2024 compared to the previous year, reflecting a growing trend among retail investors seeking to capitalize on market opportunities.

While retail investors have demonstrated remarkable activity in the stock market, some have expressed concerns about inflation’s impact on their investment power and long-term wealth accumulation. A survey conducted by BusinessDay revealed that 89% of respondents felt that inflation had reduced the amount they could allocate to investing, hindering their ability to build wealth over time. Despite these challenges, the robust participation of retail investors underscores their resilience and determination to navigate the economic landscape and pursue investment opportunities in Nigeria’s evolving market environment.

Source: Business Day

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