• Thursday, May 23, 2024
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BusinessDay

Foreign investors take shine off locals in Nigerian equities market

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Foreign investors have again outshined local investors at the Nigerian Stock Exchange (NSE) as they accounted for 81.43 percent of equities transactions in August, while local investors controlled paltry 18.57 percent. In the corresponding period of August 2013, foreign investors accounted for 52.26 percent, while local investors accounted for 47.74 percent.

The August 2014 position is a very big shift from July position at 25.17 percent in favour of foreign investors against 74.83 percent in favour of local investors. Year-to-Date (YtD), 57.41 percent of equities transaction was done by foreigners while 42.59 percent was by local investors.

On a monthly basis, the NSE polls trading figures from major custodians and market operators on their foreign portfolio investments (FPI). The latest figures from the Nigerian bourse show that FPI transactions at the nation’s bourse, which recorded its lowest flows for the year in July, increased significantly to N110.4 billion (about $0.71bn) in August 2014, up 95.68 percent from July 2014.

Domestic investors conceded about 62.86 percent of trading to foreign investors as domestic transactions decreased significantly from 74.83 percent to 18.57 percent, while FPI transactions increased from 25.17 percent to 81.43 percent over the same period.

Total transactions decreased by 25.49 percent from N181.97 billion in January to N135.58 billion in August, and foreign portfolio investors’ inflows accounted for 39.73 percent of total transactions, while the outflows accounted for 41.70 percent of the total transactions in August 2014.

In comparison to the same period in 2013, total FPI increased by 55.76 percent, while the total domestic transactions decreased by 61.11 percent. FPI outflows outpaced in flows which was consistent with the same period in 2013. Overall, there was a 0.04 percent decrease in total transactions in comparison to the same period in 2013.

Total FPI transactions of N616 billion, which accounted for 14.8 percent of total transactions in 2007, consistently increased over the years to N1.042 trillion, representing 50.8 percent of the total in 2013 (an increase of 36% over the six year period).

Domestic transactions on the other hand started at N3.556 tillion, representing 85.2 percent in 2007, but decreased significantly to N1.009 trillion, representing 49.2 percent of total transactions in 2013 (a sharp decline of 36% in the six year period).

Iheanyi Nwachukwu