Foreign stock investors withdrew N433.15bn in 11 months as investments in Nigerian shares rise by 80.6%

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Foreign investors took out a total sum of N433.15bn from Nigeria’s stock market from January to November in 2020, compared to N481.96bn in the same period of 2019, a new report by the Nigerian Stock Exchange on Wednesday has shown.

Foreign portfolio investments in the Nigerian stock market rose by 80.6 per cent to its highest level in 11 months as Nigerian equities continued to outperform average global return.

Foreign stock investors withdrew N433.15bn in 11 months as investments in Nigerian shares rise by 80.6%

The NSE, in its domestic and foreign portfolio report, said foreign inflows into the market fell to N226.13bn year-to-date from N 397.44bn in 2019.

Nigeria’s latest foreign portfolio investment (FPI) report obtained at the weekend showed that foreign portfolio inflows rose by 80.6 per cent to N25.28 billion in October 2020, a major leap from N14 billion recorded in September 2020. The latest inflow represents the highest since December 2019, with the closest being N25.27 billion recorded in June 2020.

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 data.

Total transactions at the nation’s bourse increased by 29.77 per cent from N244.90bn (about $634.55m) in October 2020 to N317.81bn (about $813.87m) in November 2020.

The NSE said the total value of transactions executed by domestic investors in November outperformed transactions executed by foreign investors by about 58 per cent.

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It said total domestic transactions increased by 53.51 per cent from N163.18bn in October to N250.50bn in November.

“Total foreign transactions, however, decreased by 17.63 per cent from N81.72bn (about $211.75m) in October to N67.31bn (about $172.38m) in November,” it said.

According to the report, institutional investors outperformed retail investors by 16 per cent.

It said retail transactions increased by 52.10 per cent from N69.94bn in October to N106.38bn in November.

“The institutional composition of the domestic market increased by 54.57 per cent from N93.24bn in October 2020 to N144.12bn in November 2020.”

The total foreign transactions carried out from January to November stood at about N659.28bn, compared to total domestic transactions of N1239.62bn.

The Head of Macroeconomic Research at EFG Hermes, Mohamed Basha, said the scarcity of foreign exchange in Nigeria was making foreign investors wary of sending their money to the country.

Basha noted that Nigeria’s economy faced a very tough 2020, suffering from a double whammy of collapse in oil prices and pandemic shock, which weighed heavily on the country’s fiscal position and the real economy.