BlackRock, one of the world’s top asset managers, is set to liquidate its iShares exchange-traded funds (ETFs) worth $400 million due to unprofitable business environments in Nigeria and Kenya.
“The Board of Directors of iShares, Inc. voted to close and liquidate the Fund. Currency conversions, including conversion of Nigeria’s currency, the Naira, will impact the timing of the Fund’s liquidation,” a statement issued by iShares Inc. said.
iShares Inc., which has invested in emerging market equities in Nigeria and Kenya over the years, fixed its last trading day for March 31, 2025, when the extended liquidation is expected to last.
“After market close no earlier than August 12, 2024, but on a date as soon as practicable, the Fund will cease trading and the creation and redemption of Creation Units.
Currently, the Fund expects the last trading date to be on or around March 31, 2025, and the liquidation date to be three days after the last trading date,” it said.
During the period, iShares will sell its assets in all markets and hold the proceeds in cash and cash equivalents.
“During the extended liquidation period, the Fund will not be managed in accordance with its investment objective and policies, as the Fund will sell down its assets, as determined by BlackRock Fund Advisors, where possible and hold the proceeds of such sales in cash and cash equivalents,” the statement said.
The exit follows a trail of a continuous exit of foreign investors from Nigeria, blamed on a tough macroeconomic environment and the naira’s devaluation.
“Currency conversions, including conversion of Nigeria’s currency, the naira, will impact the timing of the fund’s liquidation,” the statement said.
BlackRock’s iShares already liquidated its holdings in companies listed on the Nairobi Securities Exchange (NSE). The fund had a $5.2 million investment in Kenya, including Safaricom ($2.8 million), Equity Group ($1.5 million) and KCB Group ($885,000).
The fund has been providing exposure to equities in select African stock exchange markets, such as Egypt, Kenya, Morocco, and Nigeria.
Other markets are Bahrain, Bangladesh, Colombia, Estonia, Jordan, Kazakhstan, Pakistan, Philippines, Romania, Sri Lanka, and Vietnam.
Olaitan Ibrahim