Latest data shows that foreign portfolio investors have increased their participation in the Nigerian stock market.
The increase is by almost three-quarters as steady corporate earnings and improving foreign exchange (forex) Liquidity continued to sustain rally by Nigerian equities.
Foreign portfolio investments (FPI) at the weekend showed remarkable increase in foreign transactions, strengthening the overall market to sustain a two-month rally.
Total foreign transactions in the Nigerian equities market jumped by 74.2 per cent in October 2021 with inflows and outflows almost at par; a significant recovery from a long-running deficit of inflows to outflows.
The renewed foreign appetite for Nigerian equities further spurred domestic investors’ participation, pushing the overall market transactions up by 80.3 per cent from N118.15 billion in September 2021 to N213.07 billion in October 2021, the highest in seven months.
Total FPIs stood at N42.42 billion in October 2021 as against N24.35 billion in September 2021, the highest foreign turnover since February 2021. Total transactions by domestic investors also increased by 81.9 per cent from N93.80 billion in September 2021 to N170.65 billion in October 2021, the highest since March 2021.
A break-down of foreign transactions showed that the FPI deficit narrowed considerably with foreign inflows of N20.91 billion and outflows of N21.51 billion in October 2021 as against N11.93 billion and N12.42 billion respectively in September 2021.
Institutional investors continued to drive domestic transactions with the proportion of institutional investors’ dealings rising from N62.04 billion to N112.31 billion. Retail investors’ transactions increased from N31.76 billion to N58.34 billion.
However, FPIs and total market transactions continued to lag behind on a year-to-date basis. A 10-month analysis showed that total FPIs in 2021 so far stood at N329.62 billion compared with N591.97 billion recorded in comparable period of 2020.
