How foreign stock investors withdrew ₦1.01tn in 24 months

According to the Nigerian Stock Exchange (NSE), foreign investors pulled out a total of ₦1.01tn from the nation’s stock market in the past two years.

Information from the NSE also showed that the foreign portfolio investors injected N666.40bn into the stock market in the period under review.

Foreign portfolio investment outflow includes sales transactions or liquidation of portfolio investments through the stock market, while the FPI inflow includes purchase transactions on the NSE (equities only), according to the bourse.

The NSE, in its latest domestic and foreign portfolio report, said foreign outflow stood at N481.93bn in 2020, compared with N523.42bn a year before.

The report showed that foreign inflow dropped to N247.27bn in 2020 from N419.13bn in 2019.

The NSE said total domestic transactions accounted for about 74 per cent of the total transactions carried out in 2020, while foreign transactions accounted for about 26 per cent.

It said total foreign transactions carried out were about N729.21bn, while total domestic transactions were about N1.44tn.

The bourse said, “As of December 31, 2020, total transactions at the nation’s bourse decreased by 15.28 per cent from N317.81bn (about $813.87m) in November 2020 to N269.24bn (about $687.06m) in December 2020.

“In December 2020, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by about 48 per cent.”

Institutional investors outperformed retail investors by 38 per cent, according to the report.

It said retail transactions decreased by 42.45 per cent from N106.38bn in November to N61.22bn in December.

The International Monetary Fund said last week that there was an estimated $2bn backlog of requests for foreign exchange from divestment by foreign portfolio investors of naira assets, which it said were being gradually cleared by the Central Bank of Nigeria using a combination of spot and forward allocation.

The Chief Executive Officer, NSE, Mr Oscar Onyema, at the 2020 Market Recap and 2021 Outlook in January, noted that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value while foreign portfolio investors accounted for 34.72 per cent.

On the outlook for this year, he said, “We expect the marginal reopening of businesses, normalisation of the economy and revenue-diversification drive of the Nigerian government to elicit positive sentiments throughout the year.

“Our growth expectations should be noted with caution, as the recent second wave of COVID-19 in Nigeria and globally may slow down renewed social and economic activities.”