The National Pension Commission revealed that operators have increased their investments in commercial papers and bank placements from N1.15tn in October 2019 to N1.6tn in February 2020.
Pension Fund Administrators have gradually reduced investment of pension funds in the Contributory Pension Scheme in treasury bills
Latest statistics from PenCom showed that the PFAs reduced their investment of the funds in FGN treasury bills from N2.26tn in September 2019 when the total fund was N9.51tn, to N1.36tn in February 2020, when the total fund was N10.5tn.
Commercial papers are gradually becoming alternative options for investors to invest funds that were hitherto stashed in treasury bills, experts have said.
Treasury bills, which used to yield up to 14 per cent interest in recent years, and gradually crashed to 10 per cent, now offer investors between 3.3 per cent and 4.5 per cent interest.
“Many years back, yields on treasury bills were low, but moved up as the government borrowed more, increased interests and thereby encouraged people to lend,” the Managing Editor, Proshare (investment analysts), Teslim Shitta-Bey, said.
He said, “Currently, if you see what government is doing, it is trying to do more of foreign than domestic borrowing; do Eurobond and sell the debt abroad rather than in the domestic market so that it does not prevent banks from lending to the private sector.”