By Peter Egwuatu
The Nigeria Sovereign Investment Authority (NSIA) announced yesterday that it had reduced its exposure to United States government (bond) bonds to less than 20 percent after some of the world’s largest companies had concerns about rising yields and expensive valuations.
NSIA’s chief executive officer Uche Orji said the NSIA is expanding its holdings to other asset classes that will benefit from reopening economies and picking up global travel.
“NSIA’s Stabilization Fund has reduced its exposure to the US Treasury Department to less than 20 percent and can sell more stocks, which make up about 25 percent of the portfolio.
“I am very concerned about rising interest rates,” Orji said in an interview on Bloomberg TV.
“We were very optimistic in most asset classes over the past year. We are more careful now, ”he added.
The Treasury Chief joins a chorus of investors warning of the aftermath of the recent surge in US Treasury bond yields, as well as worrying signs that point to another tech bubble.
Orji said he prefers pharmaceutical, aerospace and consumer discretionary stocks. The NSIA is also closely monitoring emerging markets, which contributed to the fund’s profits last year.
NSIA plans to raise $ 900-1 billion in debt to fund the construction of an ammonia plant in southeastern Nigeria for $ 1.4 billion with partners such as Morocco’s OCP Group, the CEO said.
“Equity investors will provide the remaining funding.
They have a 100 percent discount guarantee so it’s easy to fund such a project, ”Orji said.
“We are confident that we can get into debt somewhere in the international and local markets,” he said.
It is worth noting that NSIA has landmark agreements with Morocco’s OCP, Akwa Ibom State, NNPC, GACN, NCDMB and FEPSAN to develop a $ 1.4 billion ammonia and diammonium phosphate plant as part of their Gas industrialization strategy signed.