Foreign Investors Pull Out N75b from Stock Market in January 2018

By Dipo Olowookere

The Nigerian Stock Exchange (NSE) kicked off 2018 on a very positive note and in the first trading month of the year, the market was busy with investors making gains.

This followed the over 40 percent gained by the local bourse in 2017, which made it to be among the top five performing equities market in the world last year.

But a report released by the NSE on Wednesday showed that in January 2018, foreign investors pulled out a total of N74.64 billion from the stock market.

This was against N33.05 billion cashed out by foreign investors in December 2017, representing 125.84 percent increase in the foreign investments outflows in the period under review.

Furthermore, foreign inflows decreased by 47.10 percent from N173.43 billion in December 2017 to N91.75 billion in January 2018.

In its report titled Domestic & Foreign Portfolio Participation in Equity Trading for January 2018, the nation’s bourse said total transactions during the period under review decreased by 17.96 percent from N480.80 billion recorded in December 2017 to N394.44 billion (about $1.29 billion) in January 2018.

However, in comparison to the same period in 2017, total transactions increased significantly by 313.81 percent from N95.32 billion recorded in 2017.

It said foreign investors conceded about 15.64 percent of trading to domestic investors. Total foreign transactions decreased by 19.42 percent from N206.48 billion recorded in December 2017 to N166.39 billion in January 2018.

In addition, domestic transactions also decreased by 16.87 percent from N274.32 billion to N228.05 billion within the same period.

Since 2011, foreign transactions have consistently outperformed domestic transactions. However, domestic transactions marginally outperformed foreign transactions in 2016 and 2017, accounting for 52 percent of the total transaction value in 2017.

Also, foreign transactions which stood at N1.539 trillion in 2014 declined to N518 billion in 2016, but increased significantly by 133 percent to N1.208 trillion in 2017 thereby accounting for about 48 percent of total transactions in 2017.

Over an 11-year period, domestic transactions have decreased by 62.46 percent from N3.556 trillion in 2007 to N1.335 trillion in 2017.

However, there was a significant increase in 2017 by 111 percent from N634 billion recorded in 2016.