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Given the macroeconomic uncertainties, investors can safeguard their portfolios by betting on low-beta stocks in sectors such as banks and consumer goods firms who consistently pay dividends.
These stocks with low market sensitivities have strong cash flows, solid capital positions, and stable short and long term liquidities that makes them safe-haven stocks against macro shocks.
For instance Unilever has a beta of 0.91; Cadbury, (0.65); Nestle Nigeria (0.33); Nigerian Breweries, (0.78); Guinness Nigeria, (0.035); Nascon Allied Industries, (0.91), and BUA Fo0ds, 0.57.
While Banks’ return on equity (ROE) or profits have been pressured by derivative losses and the fading of foreign exchange gains, their stocks are stable in relation to the market as they deliver a high dividend yield.
Zenith Bank has a beta of 0.54; Access, (0.63); Guaranty Trust Holdings Company, (0.48); United Bank for Africa, (0.58); FirstHoldCo, (0.46); First City Monument Bank, (0.59), and Fidelity Bank, (0.0.56).
Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
Of course, the consumer goods sector is heading towards becoming the best stocks on the NGXASI index as it has added value to the portfolios of investors.
Consumer goods firms who recorded losses last year on the back of FX volatility have returned to the path of profitability. Analysts are of the view that the low beta nature of these firms stems from the fact that these are companies from which people will continue to consume their products even during an economic downturn.
That makes them non-cyclical stocks to be owned by value investors who are not easily swayed by emotions and understands that the patient dogs eat the fattest bone.
Investing in low volatility stocks is paramount given that the monolithic nature of the Nigeria economy makes it susceptible to the vagaries of crude oil price.
Some experts are saying that the gradual recovery in economic activity and increase in foreign direct investment buoyed by the President Bola Tinubu transformation policies is just a euphoria given fiscal recklessness or indiscipline and policy inconsistencies as well as insecurity.
The National Bureau of Statistics (NBS) released the GDP report for the third quarter (Q3) of 2025, which indicated that the Nigerian economy expanded by 3.98 percent year-on-year YoY (vs 4.23 year on year (YoY) recorded in Q2 ‘2025).
Nigeria’s headline inflation rate slowed to 16.05 percent in October 2025 from 18.02 percent in September 2025 for the seventh straight month.
The yield on Nigeria 10Y Bond Yield held steady at 16.76 percent on December 10, 2025. Over the past month, the yield has edged up by 1.18 points, though it remains 4.40 points lower than a year ago, according to over-the-counter interbank yield quotes for this government bond maturity.
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