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Domestic investors raise stake in Nigerian equities

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Figures on foreign portfolio participation in equity trading at Nigerian Stock Exchange (NSE) from 2007 to February 2013, showed that domestic investors (categorised into either institutional or retail investors) accounted for 60.7 percent of the value of equities traded on the floor of the Exchange as of February, while foreign investors accounted for 39.3 percent. Stock market transactions include purchases and sales.

Comparison of total foreign flows with stock market transactions showed that out of N358.16 billion worth of transaction on the NSE as of February, N140.8 billion came as Foreign Portfolio Investments (FPIs).

This is a remarkable improvement from 2012 level when foreign investors accounted for N808.4 billion out of N1.317 trillion that came into the market, representing 61.4 percent, while 38.6 percent was from domestic investors.

In 2007, FPIs into the Nigerian bourse was N615.63 billion out of total N4.171 trillion worth of transactions, representing 14.8 percent, while the remaining 85.2 percent came from domestic investors.

In 2008, FPIs into the NSE worth N787.4 billion out of N4.758 trillion, representing 16.5 percent, while domestic investors accounted for 83.5 percent.

Also, in 2009 FPIs into the Nigerian equities market was N424.6 billion out of N1.371 trillion, representing 31 percent, while domestic investors were left with 69 percent.

In 2010, FPIs was N577.3 billion out of a total of N1.598 trillion worth of equities traded in the month under review. Foreign Portfolio Investors accounted for 36.1 percent, while 63.9 represented domestic investors.

Total foreign flows with stock market transaction in 2011 also showed that N847.9 billion came as FPIs out of a total of N1.269 trillion that came into the market, representing 66.8 percent, while domestic investors accounted for 33.2 percent.

On a monthly basis, the Exchange polls trading figures from major custodians and market operators on their foreign portfolio clients. Out of N615.63 billion polled in 2007, N256.03 billion was recorded as inflow, while N359.6 billion was outflow.

In 2008, out of N787.4 billion, N153.5 billion was recorded as inflow, while N633.93 billion was outflow. For the year 2009, the sum of N229 billion was recorded as inflow, while N195.6 billion was recorded as outflow, totalling N424.6 billion.

Figures for 2010 showed inflow of N382.1 billion and outflow of N195.24 billion, amounting to total FPIs flow of N577.3 billion; 2011 showed FPIs inflow of N512.72 billion and outflow of N335.15 billion, amounting to a total FPIs flow of N847.9 billion; in 2012, N451.1billion was recorded as inflow, while N357.31 billion was recorded as outflow, amounting to total FPIs flow of N808.4 billion. As of February 2013, FPIs inflow was N80.3 billion and N60.5 billion was recorded as outflow, all accounting for a total FPIs flow of N140.8 billion.

Stories by IHEANYI NWACHUKWU