Nigerian Stock Exchange

The Nigerian Stock Exchange lost N41 billion in April as a result of the activities of foreign investors trying to recoup their investments.

The figure represents a 12.38% increase compared to the N30.20bn recorded in March 2019.

Over N166bn Withdrawn so far: According to the NSE‘s Domestic and Foreign Portfolio Report for April, foreign investors have, so far this year, withdrawn over N166.03 worth of investment from the capital market.

Total Transaction: The report also showed that the total transaction on the NSE’s during the period under review rose to N148.91bn ($485.9m) from N110.10bn ($359.3m).

Value of transactions performed by foreign investors outstripped those of their local counterparts by 4%, the report stated.

Foreign Transactions Slumped by N320bn in 4 Years: According to the report, “foreign transactions, which stood at N1.539tn in 2014, declined to N1.219tn in 2018. Over the 12-year period, domestic transactions decreased by 66.68% from N3.556tn in 2007 to N1.185tn in 2018.”

Foreign transactions constituted about 51% of total transactions in 2018 with domestic transactions accounting for the remaining 49%, it said. The NSE reported that the first four months of 2019 recorded total foreign and domestic transactions of N298.79bn and N270.37bn.

“Total foreign transactions increased by 37.13% from N56.09bn in March 2019 to N76.92bn in April 2019. Total foreign outflows also increased by 38.34 per cent from N30.20bn to N41.78bn whilst foreign inflows increased by 35.76 per cent from N25.89bn to N35.15bn between March and April 2019.”

The value of domestic transactions performed by institutional investors surpassed those of retail investors by 18% in April. Meanwhile, the report further showed that retail transactions improved slightly by 6.6% from N27.44bn in March to N29.26bn in April. The NSE’s institutional section appreciated considerably by 60.75% to N42.73bn in April from N26.58bn recorded in March, the NSE said.

Coronation Research

Past Development: Recall that the CEO of theNSE, Oscar Onyema, had observed in January during the 2018 Market Recap and Outlook for 2019 that increase in foreign outflows indicated weakened foreign participation in the Nigerian stock market. He ascribed this to a preference for higher-yielding assets with lower risks in developed countries and imminent risks in Nigerian elections.

Foreign Portfolio Investment Explained: Foreign Portfolio Investment outflow comprises transactions arising from sales or portfolio investments through the stock market. FPI inflows are purchase transactions on the NSE involving only equities.

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