Between February and March 2023, foreign investors’ transactions on the Nigerian Exchange Limited declined by 53.16 percent, from N19.62 billion (about $42.51 million) to N9.19 billion (roughly $19.94 million). This information was revealed this month in the March issue of NGX’s Domestic & Foreign Portfolio Investment Report.
According to the report, “Total domestic transactions decreased by 19.06% from N169.29 billion in February to N137.03 billion in March 2023, as shown by total transactions executed between the current and prior month (February 2023).” Similarly, between February 2023 and March 2023, total foreign transactions declined more noticeably by 53.16 percent, from N19.62 billion (about $42.51 million) to N9.19 billion (around $19.94).
Additionally, as of March 31, 2023, the local bourse’s total transactions had dropped by 22.60% from N188.91 billion (about $409.72 million) in February 2023 to N146.22 billion (around $317.09 million).
Total transactions declined by 21.07 percent in the current month when compared to the same time in 2022 (N185.26 billion). In March 2023, domestic investors’ total transaction value exceeded international investors’ total transaction value by around 88%; local investors’ total transaction value outpaced foreign investors’ total transaction value by 96% to 6%.
Retail transactions climbed by 51.85% from N34.79 billion in February to N52.83 billion in March 2023, according to a comparison of domestic transactions for this month and the previous month (February 2023) in Nigeria. However, from N134.50 billion in February 2023 to N84.20 billion in March 2023, the institutional component of the domestic market declined dramatically by 37.40 percent.
Domestic transactions made up over 84 percent of all transactions in 2022, while international transactions made up roughly 16 percent of all transactions during same time. Foreign transactions totaled N53.71 billion as of the first quarter of 2023; the figures for January were N24.90 billion, February 2023 recorded N19.62 billion, and March 2023 reported N9.19 billion.
While speaking at the end of the Capital Market Committee meeting, the Director-General of the Securities and Exchange Commission, Lamido Yuguda, also blamed forex for the exit of foreign investors.
Yuguda said, “No matter how attractive the domestic capital market is, a foreign investor will always factor in the ability to transfer their domestic earnings into foreign exchange so that they can repatriate this foreign exchange to their countries.
“At the moment, we all know that we are having some challenges with the foreign exchange situation in Nigeria. That is international investors who are invested, are reporting some delays in assessing foreign exchange for the repatriation of their dividends or their capital.
“So because of this, you are seeing a reduced proportion of foreign investors in the Nigerian capital market relative to what this market has been used to. That is a situation that is not permanent. We expect the foreign exchange situation in this country to substantially improve.”
