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Nigeria’s foreign portfolio transactions declined by N280 billion as foreign investors remain net sellers of Nigerian equities.

According to the Nigerian Stock Exchange’s latest foreign portfolio transactional report, total foreign transactions at the Nigerian stock market dropped to N879.40 billion over the past 11 months, indicating a 24.1% or N279.62 billion drop from N1.159 trillion recorded in the period in 2018.

The month of November saw a change in fortune, as FPI transactions reversed a three-month consecutive increase dropping by 16.4% or N16.97 billion to N86.76 billion in November 2019 as against N63.90 billion, N94.45 billion and N103.73 billion recorded in August, September and October 2019 respectively.

Meanwhile, the NSE report used two foreign portfolio inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Inflow includes purchase transactions on the NSE as outflow includes sales transactions of equity portfolio investments.

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Zimvest

The Breakdown  

  • Local portfolio investors remained mostly on the sell side of foreign transactions with FPI deficit of N84.52 billion over the past 11 months.
  • In November 2019, foreign outflows stood at N53.17 billion as against inflows of N33.59 billion, representing a deficit of N19.58 billion for the month.
  • Foreign outflows stood at N481.96 billion as against inflows of N397.44 billion in 2019 year to date.
  • Total foreign transactions for the six-month period ended June 30, 2019, had stood at N472.78 billion, a decline of 40.9% from N799.70 billion recorded within the period in 2018.
  • Foreign outflows had also continued to outpace inflows with net foreign portfolio investment (FPI) deficit rising from N38.41 billion in the first half of 2018 to N42.84 billion in 2019.

However, the decline in foreign portfolio transactions according to analysts can be attributed to political risk, fluctuations in the global financial markets and weak macroeconomic fundamentals.

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