Foreign investment inflows falls, as investors withdraw N16bn

Year-to-date foreign portfolio investment inflow into the Nigerian equity market fell by N37.85bn.

This was contained in the latest report of the Nigerian Exchange Limited (NGX), formerly Nigerian Stock Exchange, which also revealed that in the month of August, N15.93bn was withdrawn by investors.

The NGX polls trading figures from capital market operators and their domestic and foreign portfolio investment flows, on a monthly basis.

The NGX revealed in the August 2021 issue of its Domestic and Foreign Portfolio Investment report, that total foreign investment inflows in August were N10.72bn, while outflows were higher at N14.64bn.

As of August 2021, foreign outflows YTD summed up to N139.39bn, 54.97 percent lower than N308.89bn recorded as of August 2020

Also from the report, YTD foreign inflows recorded a 23.46 percent drop at N123.46bn, lower than N161.31bn invested into the exchange by foreign investors in the previous period of 2020.

Total transactions for August 2021 against the period August 2020, dropped from N94.45bn to N89.42bn.

The total foreign transactions between July and August increased from N15.53bn to N25.36bn showing a 63.30 percent increase.

On the domestic transactions, institutional investors outperformed retail investors by 0.44 percent, the report showed.

Furthermore, domestic retail transactions decreased from N37.59bn in July to N31.89bn in August 2021, a 15.16 percent drop.

The institutional composition of the domestic market suffered a 12.22 percent decrease from N36.65bn in July to N32.17bn in August.

Mr Sola Oni, the Chief Executive Officer of Sofunix Investment and Communications, told PUNCH correspondent that Foreign Portfolio Investors had been very cautious about the Nigerian market for a while.

According to him, they were speculators with calculated risk models.

He said, “They are not comfortable with a mix of macroeconomic vagaries such as high inflation and exchange rates conundrum.

“Scarcity of forex has also become a major impediment to their investment decision as repatriation of capital is no longer a tea party.

“They do a lot of risk analysis, including country risk.”

 

Source: The Punch