Young people in Nigeria have been encouraged to explore the opportunities of investing in the Halal investment market, to boost liquidity and diversify their portfolios.

Mr. Abdulazeez Kuranga, a Portfolio Manager/Research Associate with Cordros Capital, made this point while speaking on "Investment Opportunities in the Halal Market." According to him, the minimum investment in the Halal Fixed Income fund is N2,500 which is accessible to many young investors in the country.

He noted that Halal Investments helps to achieve capital preservation and is ethical, aligning with morals. "Most of these investments are seen in 'Sukuk,' which are fixed income contracts or shariah-compliant options. A major example is the outer marina road in Lagos which is part of the infrastructure financed by Sukuk since 2017". 

Speaking further, he said investors will benefit from the profit sharing derived from the return on investments in Sukuk. He cited the example of the Cordros Halal Fixed Income, designed for ethically-minded investors and provides them with an opportunity to diversify their portfolios and achieve capital preservation.

Giving an overview of the journey of Halal investments in Nigeria, the analyst pointed out that Halal investments are still yet to gain traction in the country. He attributed this to the low capital base of the three(3) leading Non-Interest Banks. He also identified the regulatory environment, lack of incentives for issuers and limited product offerings as challenges facing the Halal market. 

On the outlook for Halal investments and the non-Interest finance market, Kuranga added, "Shariah-compliant investments during global economic uncertainties experience stable flows because of the ethical components. Between 2002 and 2012, the Islamic Finance Index outperformed the Dow Jones by 14.26% amidst the avian flu outbreak and a global economic recession".

Looking at the Nigerian market, he re-emphasized that an enabling regulatory environment will be the critical driver of activities in the Halal and Sharia-compliant investment market.

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