Foreign portfolio investments into the country’s stock market increased in July as edgy foreign investors appeared to ignore the significant undervaluation of Nigerian equities and the new earnings season to sustain negative foreign portfolio investment trend.
The latest Foreign Portfolio Investment (FPI) report of the Nigerian Stock Exchange (NSE) indicated that there was significant increase in foreign portfolio investment outflow.
The report, obtained yesterday for the month of July, 2015, showed that foreign portfolio investment outlook has so far this year been negative, with year-to-date deficit of N362.42 billion.
According to the NSE, foreign outflows totalled N58.83 billion in July as against inflow of N48.64 billion, indicating a significant increase on the downtrend in June when foreign portfolio outflow was N26.98 billion against inflow of N42.67 billion.
Year-to-date, total foreign inflow stood at N334.04 billion compared with outflow of N362.42 billion, representing net deficit of N28.38 billion. The report underlined concerns that foreign investors were downsizing their portfolios.
The latest report also showed dominance of the foreign investors in the Nigerian market with foreign transactions increasing from 34.24 per cent in June to 62.91 per cent in July. On the contrary, Domestic transactions decreased from 65.76 per cent to 37.09 per cent in the same period.
Also, the total foreign transaction at the nation’s bourse which was N69.65 billion at the end of June 2015 increased to N107.47 billion at the end of July 2015, up 54.30, while Domestic investors’ transaction went down from N133.80 billion in June to N63.36 billion in July.
The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.
Source : Leadership