Foreign investors made N83.41bn gain from equities sales in 2015

Foreign investors cashed-out a huge N83.41billion which resulted from capital appreciation recorded in their equity holdings at the Nigerian Stock Exchange (NSE).

The Nigerian Stock Exchange trading figures from major custodians and market operators on their foreign portfolio investments (FPI) in 2015 show foreign inflow of N470.83billion as against outflow of N554.24billion. In 2014, foreign inflow was N692.39billion while recorded outflow was N846.53billion.

The FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (equities only).

From a record foreign inflow of N48.03billion in January 2015 and outflow of N51.08billion; foreign investor reduced their investment in equities to paltry N17.04billion as at December 2015 while recorded outflow in the same month was N34.31billion.   

Foreign equity buyers accounted for 53.79 percent of total equity transactions at the Nigerian Stock Exchange (NSE) in the year 2015 as against domestic investors who controlled 46.21percent.

Total foreign transactions decreased by 33.39percent from N1.538trillion recorded at the end of 2014 to N1.025trillion at the end of 2015 while total domestic transactions decreased by 22.53percent from N1.136trillion recorded at the end of 2014 to N880.56 billion recorded at the end of 2015.

Total transactions at the nation’s bourse decreased by 41.72 percent from N189.72 billion recorded in January to N110.56 billion (about $56 million) in December 2015. This represents a decrease of 13.49percent from N127.8 billion recorded in November.

The total domestic transactions increased by 7.26% from N55.2b in November to N59.21b in December 2015. In comparison to December 2014, total domestic transactions decreased from N133.6b to N59.21b. 

The institutional composition of the domestic market which was about 47.17percent in November increased to 67.86percent at the end of December, whilst the retail composition decreased from 52.83percent to 32.14percent in the same period.

According to the Broker Dealer Regulations department of the NSE, “Information on the retail and institutional components of the total domestic transactions in December is based on data obtained from about 96percent of active dealing members of the Exchange”.

In comparison to December 2014, institutional composition decreased from 72.99percent to 67.86percent, whilst the retail composition increased from 27.01percent to 32.14percent in the same period.

The NSE noted in its latest trading figures that in 2013, there was a major rebound in the domestic component which led to an almost equal split in foreign versus domestic transactions.

“This dropped in 2014 where FPI outperformed domestic transactions. In 2015 FPI dropped compared to 2014. However, it slightly outperformed domestic transactions in the same period”, the NSE noted.

Iheanyi Nwachukwu