Foreign investors eject N52.37bn from NSE in February

By Omobayo Azeez

Participation of most foreign investors at the Nigerian Stock Exchange (NSE) in February was initiated by desired to sell their investments in the market, business A.M can report.

According to statistics on foreign portfolio investments in the market, foreign investors moves shares worth N71.34 billion which represented 48.04 per cent as their local counterparts traded shares worth N77.16 billion or 51.96 per cent.

Of the total deal expatriates in the market, 73.41 per cent or N52.37 billion was repatriated from the market as out flow, leaving just N18.97 billion or 26.59 per cent as the amount received by the local economy via the stock exchange market.

Further analysis showed that in January, total activities at the exchanged slowed down significantly from N235.46 billion in January to N148.50 billion in February, equivalent to 36.93 per cent lull in the market.

Although the latest record indicated that total deals at the exchange in January and February advanced to N383.67 billion from an aggregate of N310.16 billion in the same period of 2019.

The value of domestic transactions executed by Institutional investors outperformed retail investors by 24 per cent as the domestic retail investors brokered N29.56 billion in the month under review against N47.60 billion facilitated by institutional investors.

A comparison of domestic transactions in the current and prior month revealed that retail transactions decreased by 63.81 per cent from N81.67 billion in January 2020 to N29.56 billion in February 2020.

Similarly, the institutional composition of the domestic market decreased by 42.97 per cent from N83.47 billion in January 2020 to N47.60 billion in February 2020.

Going down the memory lane, over a13 year period, domestic transactions decreased by 72.30 per cent from N3.556 trillion in 2007 to N985 billion in 2019 whilst foreign transactions increased by 53.08 per cent from N616 billion to N943 billion over the same period.

Total domestic transactions accounted for about 51per cent of the total transactions carried out in 2019, whilst foreign transactions accounted for about 49 per cent of the total transactions in the same period.

Meanwhile, Mallam Garba Kurfi, explained that the interest of the foreign investors is goaded by yield and safety of their investments, among other factors.

He said since they are not bounded by any law to restrict their movement, “they follow the wave of return on investment (RoI) and save havens for them.”

Analysts have also speculated that amidst speculation of a devalued naira and dwindling foreign reserves, foreign investors are scared of getting their money trapped in a situation similar to what they experienced in the 2016 when the dollar was in acute shortage and many foreign investors pulled out of the market.