The dividend yield on the NSE 30 Index at the end of May stood at 6.26%, meaning income for investors was more than 50% higher than in South Africa (4.21%), Egypt (4.01%) and Kenya (3.77%), research from Chapel Hill Denham in Lagos shows.
Even so, international investors are likely to give Nigerian stocks a wide berth due to fears of further currency instability, says Ibrahim Shelleng, managing director at Credent Investment Managers in Abuja. Real Nigerian dividend yields after inflation are still negative, he adds. Core inflation in the first quarter was over 18%, whilst the highest dividend yields were around 14%.
Interest is more likely to come from domestic investors facing limited alternatives, Shelleng says. Local investors will need to discriminate between high-yielding stocks.