Foreign investors pulled out a total of N523.42bn from the nation’s stock market last year, while they injected N419.13bn into it, data from the Nigerian Stock Exchange showed. The stock market has seen more investors dump their shares in recent weeks on the back of the sharp drop in oil prices caused by the spread of coronavirus. The market capitalisation of equities listed on the NSE dropped by N1.84tn to N11.85tn last Friday from N13.69tn the previous week.
Foreign Portfolio Investors withdrew N46.50bn from the stock market in January, up from N41.45bn in December 2019, the NSE said. Foreign Portfolio Investment outflow includes sales transactions or liquidation of portfolio investments through the stock market, while the FPI inflow includes purchase transactions on the NSE (equities only), according to the bourse.
The foreign investors withdrew N642.65bn from the market in 2018, compared to an inflow of N576.45bn. According to the NSE, total transactions at the nation’s bourse decreased by 25.84 per cent from N172.52bn in November 2019 to N127.94bn in December. “In December 2019, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors marginally by two per cent,” it said. The bourse said total domestic transactions decreased by 24.44 per cent from N85.76bn in November to N64.80bn in December, adding that total foreign transactions decreased by 27.22 per cent from N86.76bn to N63.14bn.
The Chief Executive Officer, NSE, Mr Oscar Onyema, said recently that the Nigerian bourse had to compete with developed and emerging capital markets which saw risk-based assets priced and valued more competitively last year.He noted that the US Fed Reserve’s policy enabled foreign investors to economically enhance leverage and seek investment opportunities in their home and adjacent countries, as Nigeria adjusted to new economic realities.
“On the domestic front, investors contended with the macroeconomic landscape, fiscal and monetary policy direction and a wait-and-see attitude given trends in FPIs,” he said. According to Onyema, despite welcomed stability in the foreign exchange market due to the intervention of the Central Bank of Nigeria, concerns around the stability of the Naira remained prevalent. He said this as well as the moderate corporate earnings during the first half of 2019 impacted the equity market negatively. “However, our fixed income market performed exceptionally well in 2019, reflecting a flight to safety,” he added.