Portfolio Investments Take A Hit, Drop By 80% In April

By Nse Anthony-Uko

ABUJA, (Sundiata Finance) – Portfolio investments on the Nigerian Stock Exchange (NSE) took a hit in April dropping a whooping 80.74 per cent in value compared to the previous month.

Analysis of foreign and domestic portfolio investors’ participation in the equity trading as carried out by the NSE showed that total transactions went down to N54.90 billion from N285.05 billion recorded in March 2017.

Further analysis of the transactions showed that domestic investors outperformed foreign investors by 18.22 per cent. Total domestic transactions dropped by 78.73 per cent from N152.54 billion recorded in March 2017 to N32.45 billion in April 2017, while foreign transactions also fell by 83.06 per cent from N132.51 billion to N22.45 billion within the same period.

The performance trend also reflected on monthly foreign inflows and outflows as foreign inflows dropped by 38.49 per cent from N23.64 billion in March to N14.54 billion in April 2017. Foreign outflows also dropped by 92.73 per cent from N108.87 billion in March to N7.91 billion in April 2017.

In comparison to the same period in 2016, total FPI transactions from January to April 2017 increased by 56.85 per cent from N148.87 billion to N233.51, while the total domestic transactions increased by 27.85 per cent from N215.77 billion to N275.87 billion.

It stated further that the institutional composition of the domestic market decreased by 85.83 per cent from N128.77 billion recorded in March to N18.25 billion in April. The retail composition decreased by 40.26 per cent from N23.77 billion to N14.20 billion within the same period.

It said the figure indicated a shaper decline in participation by institutional investors in comparison to their retail counterparts in the period under review.

However despite, the decline in the FPI portfolio in April, stockbrokers believed that the announcement of the Investors’ & Exporters’ (I&E) FX window on the 21st April, 2017, has boosted the foreign investors confidence back into the market as seen in market activities for the month May. They noted that the Nigerian stock market is dominated by foreign investors and that has been the driver in recent time.

“So we want the Central Bank of Nigeria (CBN) to sustain the window until we have stability in the forex market.  Also other factor is the Economic Recovery Growth Plan, ERGP that has been put in place by the federal government will give investors both local and international the direction of the economy,” they said.


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