Nigeria’s foreign portfolio outflows up 59.75% in February

The latest domestic and foreign portfolio report released by the Nigerian stock exchange has shown that Nigeria’s foreign portfolio investment (FIP) outflows increased by 59.75 percent in the month of February.

 

 A total of N81.6 billion was recorded as outflow for the month of February up 59.7 percent from the previous month and dropped 22.5 percent year on year.

According to the report, monthly FPI transactions at the nation’s bourse which was N99.11 billion at the end of January 2015 increased to N133.95 billion (about $0.68 billion) at the end of February 2015, up 35.15percent from January 2015.

 

“Domestic investors conceded about 45.22 percent of trading to foreign investors as Domestic transactions decreased from 47.76 percent to 27.39 percent while FPI transactions increased from 52.24 percent to 72.61 percent over the same period.”

 

“In comparison to the same period in 2014, total FPI transactions decreased by 1.71 percent, whilst the total domestic transactions decreased by 19.03 percent. FPI outflows outpaced inflows which was consistent with the same period in 2014. Overall, there was a 7.15percent decrease in total transactions in comparison to the same period in 2014,” the report adds.

The slide in foreign portfolio investment (FPI), which began in 2013, continued into 2014 and is still being experienced in 2015.

 

The Central Bank of Nigeria’s External Sector Development Report for the second quarter of 2014 showed that FPI inflows in April-June 2014 totaled $3.9bn, compared with $6.5bn in the corresponding period of 2013.

 

The NSE report which helps to measure activities of foreign investors in the nation’s bourse considering how much they influence demand and supply for stocks. A higher FPI activity buttresses market liquidity and activity.

 

There has been a mixed response from foreign investors to the poor performance of the Nigerian stock market in 2014, when the All-Share Index dropped by 16.1percent and total market capitalisation fall by 24 percent in US dollar terms.

 

According to the Nigerian Stock Exchange, foreign inflows on the bourse between January and November 2014 totaled N621.3bn (US$3.9bn), up from N498.9bn in the same period of 2013, suggesting that investor interest in the Nigerian equity market remained strong.