Investors update: Nigerian equities post impressive monthly gain in May

Nigerian equities post impressive monthly gain in May

Highlights

• The Nigerian stock market delivered an impressive performance with a gain of 6.42% in May, outperforming other markets in Sub-Saharan Africa per Nairametrics findings.
• Market confidence was boosted by President Tinubu’s inauguration and promises of extensive reforms, including the removal of a costly fuel subsidy and the unification of the country’s exchange rate.
• Analysts say investors should remain cautious, however, as historical data shows June has been a challenging month for Nigerian stocks, emphasizing the importance of prudent investment strategies and diversification.

Source: Nairametrics

Our Takeaway

Equity trading on the Nigerian Exchange Limited (NGX) finished the month of May in the green territory as the NGX All-Share Index appreciated by 6.42% to close at 55,769.28 index points. Similarly, Nigeria’s main shares index, which has been on the low profile, on Tuesday, May 30 soared to its single biggest daily gain in about two years as investors cheered the president’s inauguration speech. The index rose 5.2%, representing about 81% of the month’s total gain as financial markets in Africa’s biggest economy welcomed the smooth handover to a new government after closely fought elections.

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Uganda’s Zofi Cash raises $1m pre-seed funding to scale

Highlights

• Ugandan fintech startup Zofi Cash has secured $1 million in pre-seed funding to double down on its payday services for salaried workers. 
• An instant salary advance platform, Zofi Cash offers employees early access to wages, ensuring that people have the financial resources they need to take care of immediate needs without waiting until the end of the month. 
• The funding was raised from a single investor in Advancly, a business-to-business financing company with a presence in six African countries and has invested in several African fintech startups, such as Kenyan ventures LipaLater, MarketForce, and Pezesha.

Source: Disrupt Africa

Our Takeaway

In Africa, over 70% of the workforce is paid every 30 days. By living paycheck to paycheck, the 30-day pay cycle keeps 40% of them in an unending debt cycle as they struggle to match their income to daily expenses, emergencies, and opportunities. In addition, African businesses have historically struggled to provide solutions for employees to access daily salaries due to legacy payroll processes, lack of available cash flow, and other factors. These thus make on-demand salary access a huge market opportunity in Africa, and startups like Zofi, Earnipay, Workpay, and Zuberi are looking to capture it. 

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Kenya gets two new digital innovation hubs from Diageo, GIZ

Highlights

• Global drinks company, Diageo Plc, plans to host the newly launched Africa Digital Hub in Kenya, from where it will serve key markets including Kenya, Nigeria, South Africa, and Ghana.
• Similarly, The GIZ Digital Transformation Centre (DTC) Kenya, in collaboration with the GFA Group, plans to establish and operate a Green Digital Innovation Hub (gDIH) in the East African nation.
• The developments come as Kenya continues to emerge as a favorite innovation destination for global tech giants, thanks to mobile penetration, tech innovation, and an emerging middle-class population.

Source: Disrupt Africa, ABC

Our Takeaway

Africa is a huge market for mobile digital services given the relatively high mobile phone penetration. Already, the continent accounts for between 65-70% of the world’s more than $1 trillion mobile money value. With the majority of activity and transactions in Africa still offline and manual, there remains a massive under-tapped market, and initiatives such as digital innovation labs are crucial to helping startups and innovators capture this.