What does it mean for FTSE 100 companies to have operations in Nigeria?

It means these UK-listed companies have significant business activities, revenue streams, or physical operations within Nigeria. This could include manufacturing facilities, retail networks, financial services, or natural resource extraction that contributes meaningfully to their overall profits.

Why invest in UK companies for African exposure instead of direct African stocks?

UK-listed companies offer African exposure through established, regulated markets with transparent reporting standards. This provides easier access, better liquidity, and familiar regulatory oversight whilst still benefiting from African economic growth through these companies' operations.

What sectors are typically represented in this type of investment theme?

Common sectors include energy companies with oil and gas operations, consumer goods firms serving Africa's growing middle class, telecommunications providers expanding connectivity, financial services with African banking operations, and natural resource companies with mining interests.

What is global diversification and why does it matter?

Global diversification means spreading investments across different countries and regions to reduce risk. By investing in companies with Nigerian operations, you're indirectly accessing a different economic cycle and growth patterns, which can help balance your portfolio's overall performance.

Are these investments riskier than typical UK stocks?

These companies may face additional risks from their African operations, such as currency fluctuations, political changes, or economic volatility in those regions. However, they're still established FTSE 100 companies with diversified global operations, which can help balance these risks.

9 handpicked stocks

FTSE 100 Nigeria Exposure Explained

Many of the UK's largest public companies have significant operations across Africa, creating economic links that investors can explore for global diversification. This basket offers exposure to these globally recognised, UK-listed firms in sectors like energy, finance, and consumer goods that are active in the Nigerian market.

Han Tan | Market Analyst

Updated 1 day ago | Published at September 10