Foreign portfolio investors who dominated transactions in the Nigerian stock market in February this year have reduced their stake in the market. However, they still had an upper hand compared to domestic investors with respect to transactions in the market in March this year.
According to Foreign Portfolio Investment (FPI) report released by the Nigerian Stock Exchange (NSE) yesterday, foreign investors accounted for 55.73 per cent of the total transactions in the NSE in March while domestic investors accounted for 44.27 per cent. However, this is a sharp drop from their position in February this year; they accounted for 72.61 per cent of the total transactions in the market while domestic investors settled for just 27.39 per cent of the transactions. The drop in FPI transactions in the market is even more dramatic when compared with the level in the corresponding period of last year. In March 2014, FPI transactions was as high as 78.25 per cent
However, the worrisome FPI outflow in February this year which saw foreign investors moving out a princely N81.6 billion out of the country has abated. According to the NSE, FPI outflow in March stood at N52.41 billion as against N81.6 billion February, representing a drop of 35.78 per cent. Compared to the same period last year, FPI outflow in March this year is also quite low. The outflow was as much as N75.42 billion in March 2014. Analysts said the sharp drop in FPI outflow is an indication of confidence in the Nigerian economy by foreign investors. FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, while FPI inflow includes purchase transactions on the Nigerian Stock Exchange (equities only).
