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BUSINESS & ECONOMYCapital MarketCOVERNEWSLETTER

Foreign Portfolio Investment in NSE Leaps by 59.8% in H1

CBN Forex

Foreign Portfolio Investment, FPI, transactions on the Nigerian Stock Exchange, NSE,  within the first half of the year , posted a 59.81 per cent increase in total .

The NSE in a “Foreign Portfolio Investment Report – June 2017” released via its official website said, “In comparison to the first half of 2016, total FPI transactions increased by 59.81% from N269.22 billion to N430.23, whilst the total domestic transactions increased by 42.19% from N505.03 billion to N355.19 billion.”

The report also noted that “Total transactions at the nation’s bourse increased by 7.13% from N205.61billion recorded in May 2017 to N220.27billion (about $0.72 billion) in June 2017.”

Also, total transactions for the first half of the year increased by 49.78% from N624.41 billion recorded in 2016 to N935.26 billion in 2017.

Domestic investors outperformed foreign investors by 7.82%. Total domestic transactions increased by 7.53% from N110.42 billion recorded in May 2017 to N118.74 billion in June 2017. Foreign transactions also increased by 6.66% from N95.19 billion to N101.53 billion within the same period.

The NSE said, Monthly foreign inflows outpaced outflows. However, foreign inflows decreased by 10.95% from N73.15 billion in May 2017 to N65.93 billion in June 2017 while foreign outflows increased by 38.09% from N22.04 billion in May 2017 to N35.60 billion in June 2017.

Highlighting the domestic composition of transactions on the Exchange between January and June 2017, the NSE said, “The institutional composition of the domestic market decreased by 17.09% from N67.95 billion recorded in May to N56.34 billion in June 2017.”

However, the retail composition increased by 46.92% from N42.47 billion to N62.40 billion within the same period.

This indicated a higher participation by retail investors over their institutional counterparts for the first time this year.

Although the Foreign / Domestic trend from 2007 to 2016 showed that foreign transactions had consistently outperformed domestic transactions, domestic transactions marginally outperformed foreign transactions in 2016, accounting for 55% of the total transaction volume in 2016.

Also, foreign transactions further declined by 66.34% from N1, 539b in 2014 to N518b in 2016, representing about 45% of total transactions in 2016.

Over the nine year period, domestic transactions significantly decreased by 85.43% from N3, 556b in 2007 to N634b in 2016.

While the Nigerian stock market looks upward, the Nigerian All Share Index has been rallying, up 30.5% year-to-date on account of policy developments that supported the benchmark.

 

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