The Nigerian Stock Exchange (NSE) has disclosed that Nigeria’s Foreign Portfolio Investment increased by 59% in March to ₦132.21 billion; against the ₦83.22 billion recorded in February. This information is contained in a report detailing all transactions in Nigeria’s exchange market during the past month ended March 31st, as published on the NSE website.
According to the report, domestic investment also improved to an impressive 51.48% of total investments with a total of ₦140.27 billion recorded, against February’s ₦128.83 billion. This, therefore, shows that domestic investors invested more money than their foreign counterparts by a 2.96% margin.
Meanwhile, the total transaction at Nigeria’s bourse in March stood at ₦272.48 billion, a 28.50% increase from the ₦212.05 billion recorded in the preceding month. Cumulative transactions since January this year has also increased by 48.29%; from ₦454.48 billion recorded in 2017, to ₦878.97 billion in 2018.
The cumulative transactions from January to March increased by
48.29% from N454.48 billion recorded in 2017 to N878.97 billion in 2018.
Domestic investors outperformed foreign investors by 2.96% in March 2018.
Why the increase in FPI?
Enhanced foreign exchange liquidity is the main factor behind the increase in foreign portfolio investment. These foreign investors are now a lot more confident about the ease of entry and exit of their holdings, due to the introduction of the Investors and Exporters (I and E) window.
As we reported earlier, oil prices (which recently surpassed US$75 per barrel) are expected to keep rising. So far, the crude oil trend has helped the country grow its foreign reserves, stabilized its foreign exchange market, and attracted Foreign Portfolio Participation.
Foreign investors are key players in any economy, particularly developing countries like Nigeria. Therefore, as long as crude oil prices and the political economy remain favorable, FPI inflows will not only continue to improve but also contribute to Nigeria’s economic growth.