Foreign Investors Move N81.6 Billion Out of Nigeria – Ray Echebiri
Foreign portfolio investors moved a princely N81.6 billion out of Nigeria in February this year. Analysts said the sell-off by foreign investors may not be unconnected with the fears over 2015 general elections and further depreciation of the Naira.
This worrisome development is contained in the Nigerian Stock Exchange (NSE) monthly report on Foreign Portfolio Investment (FPI) for the month of February 2015. The FPI outflow for the month of February represents a dramatic increase of 59.69 per cent from the January outflow of N51.08 billion. However, FPI inflow increased from N48.03 billion in January to N52.35 billion in February. 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).
But surprisingly, foreign investors made more investment in the NSE than Nigerian investors in February. According to the NSE, foreign investors accounted for about 72.11 per cent of the total transactions in the local bourse while local investors accounted for just 27.39 per cent.
Monthly FPI transactions at the NSE which was N99.11 billion at the end of January 2015 increased to N133.95 billion at the end of February 2015, up 35.15 per cent from January 2015. Domestic investors conceded about 45.22 per cent of trading to foreign investors as domestic transactions decreased from 47.76 per cent to 27.39 per cent while FPI transactions increased from 52.24 per cent to 72.61 per cent over the same period.
The NSE said in comparison to the same period in 2014, total FPI transactions decreased by 1.71 per cent, while the total domestic transactions decreased by 19.03 per cent.