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Nigeria Stocks to Return More Than Bonds in ‘12, Vetiva Says

Nigerian stocks will probably outperform bonds this year as company’s earnings grow, while inflation expectations limit gains in the debt market, according to Lagos-based Vetiva Capital Management Ltd.

Equities offer total return of 19 percent in 2012, including dividend yield of 7 percent, Vetiva said in a report e-mailed today. Bonds will return 16 percent, with a 1 percent price gain and 15 percent coupon, it said.

“With attractive market valuation on fundamentally sound stocks, we favor equities as an asset class over fixed income,” Vetiva said.

Guaranty Trust Bank Plc (GUARANTY), Zenith Bank Plc (ZENITHBA), First Bank of Nigeria Plc (FIRSTBAN) and Diamond Bank Plc (DIAMONDB) have a “buy” recommendation at Vetiva.

To contact the reporter on this story: Vincent Nwanma in Lagos at vnwanma@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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