The Nigerian Stock Exchange lost a massive 2.4% last week after the market tanked on the first day of trading last week. Indications suggest the sell-off may have been as a result of foreign portfolio investors who have been trying to exit the equities market following their inability to repatriate funds.
However, as companies start to pay dividends foreign equity investors have no choice but to activate their commercial rights to repatriate their money in forex at the official rates. A report from The Nation confirms this indeed is what may have happened last week. According to the paper, foreign investors took $6.8 million of the disbursed cash last week.
Stanbic IBTC Bank disbursed $100,000 to 32 investors divesting from the equities market. The paper also reports the beneficiaries are Merill Lynch International, HSBC, Brown Brothers, JPM Securities, The Bank of New York Mellon 1, The Bank of New York Mellon 2, HSBC Funds Services London, Deutsche Bank London, Standard Bank of South Africa, and Credit Suisse International, among others.
More sell-offs are likely to occur this week as the threat of MSCI to yank Nigeria off its index draws closer to implementation.