Nigeria‘s stock market is becoming the most interesting one on the African continent to foreign investors after the country devalued its currency, emerging market veteran investor Mark Mobius said on Wednesday.
Earlier in June, Africa’s biggest economy finally ditched its 16-month old currency peg to the dollar that had throttled foreign exchange markets, led to widespread capital flight and caused its first quarterly economic contraction since the 1990s in a move widely welcomed by investors.
“Everybody is concerned what is happening to the country … so Nigeria would be the place to look now,” said Mobius, Executive Chairman of Templeton Emerging Markets Group.
“The naira is still a bit overvalued, so we could see a further fall in the naira,” he said.
After the peg of just under 200 to the dollar was abandoned, the naira has been trading at around 282 this week but was trading at around 350 on the black market.
Mobius said Templeton could add to its holdings in the country in the second half of the year.
But he added he would like to see a further rise in oil prices and more outside investment in the power sector.
Stocks had rallied more than eight percent last week after the peg was removed.