The Nigerian Stock Exchange (NSE), on Friday said there was a significant growth in Foreign Portfolio Investment (FPI) outflows in the month of February.
In a report titled: “analysis of domestic and foreign transactions for the month” of February, the NSE management said foreign outflows increased by 97.8% from N27.81bn in January, to N55.01bn.
FPI outflow, according to the bourse, “includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (Equities only).”
The period coincided with uncertainty that followed Nigeria’s general elections, the first of which was the Presidential and National Assembly polls, held on February 23, after a one-week postponement from the initial date, while governorship and State Assembly elections held on March 9, 2019. Although the elections are long over, they were declared inconclusive in some states including Kano, the commercial capital of Northern Nigeria, Bauchi in the North East, Sokoto and oil rich Rivers, among others, just as the main opposition Peoples Democratic Party (PDP) is already challenging the outcome of the Presidential election.
Foreign investments inflow for the period also rose by a significant 91.24% from N22.97bn in January to N43.93bn.
Total transactions on the bourse for the period climbed by 54.06% from N122.08bn to N188.08bn (representing about $613.9m) in February 2019, but when compared to trading figures in the corresponding month of 2018, it showed a drop by 11.30%.
Of this figure, total value of transactions executed by foreign investors in February 2019 outperformed those by domestic investors by 6%, just as transactions executed revealed that total foreign transactions increased by 48.00% from N66.85bn in January 2019 to N98.94bn.
Transaction value in the domestic market, institutional investors’ outperformed retail investors by 8%, even as the total retail transactions grew by 38.26% from N29.66bn in January.
In the same measure, in what the NSE says is indicative of a higher participation by institutional investors’ over their retail counterparts in February 2019, institutional composition of the domestic market also increased significantly by 88.15% from N25.58bn in January 2019 to N48.13bn in February 2019.
Between 2011 and 2015, foreign transactions consistently outperformed domestic transactions, while domestic transactions marginally outperformed foreign transactions in 2016 and 2017, the peak of Nigeria’s economic recession which lingered for five consecutive quarters (15 month), while it remained almost at par in 2018.
Foreign transactions which stood at N1.539t in 2014 declined to N1.219t in 2018, while domestic transactions decreased by 66.68% from N3.556t in 2007 to N1.185t in 2018.
Total foreign transactions accounted for about 51% of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49% of the total transactions in the same period, the report added.