BY CHINENYE ANUFORO
Foreign Portfolio Investment (FPI) at the nation’s stock market dropped to N102.56 billion in March from N133.92 billion it recorded the previous month even as foreign investors pulled out N29.19 billion from the market the same period
Activities of FPI outflows, which outpaced inflows in the first quarter, showed that in January, the outflows which stood at N51.08 billion, went up to N81.60 billion in February and declined to N52.41 billion in the review period.
Also, the domestic transactions which was N50.54 billion at the end of February, increased to N81.46 billion at the end of March, up 61.18 per cent. Domestic investors conceded about 11.46 per cent of trading to foreign investors as foreign transactions decreased from 72.61 per cent to 55.73 per cent while domestic transactions increased from 27.39 per cent to 44.27 per cent over the same period.
In comparison to the same period in 2014, total FPI transactions decreased by 21.44 per cent, whilst the total domestic transactions increased by 124.47 per cent. FPI outflows outpaced inflows which was consistent with the same period in 2014. Overall, there was a 10.30 per cent increase in total transactions in comparison to the same period in 2014.
The NSE said that total FPI transactions of N616 billion which accounted for 14.8 per cent of total transactions in 2007 increased over the years to N1.539 billion representing 57.5 per cent of total transactions in 2014 (An increase of 42.7 per cent over the 7year period).
Domestic transactions on the other hand started at N3.556 billion representing 85.2 per cent in 2007, but decreased significantly to N1.137 billion representing 42.5 per cent of total transactions in 2014 (A sharp decline of 42.7 per cent in the 7 years.
According to capital market analysts, the exit of foreign investors from the equities market in the first quarter following uncertainty in the economic and political state of the country. They believed that with the peaceful election a return of foreign investors to the market was likely soon.
“Foreign investors had been skeptical about the Nigerian markets since late last year, unnerved by political uncertainty before the vote as well as the sharp fall in the global price of oil which negatively impacted the currency, triggering devaluation in November,” they said.
Source : SunOnline