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Foreign investments in NSE rise to N705bn

In spite of the activities of the extremist religious sect, Boko Haram, in Nigeria, foreign investors are showing increasing interest in the Nigerian Stock Exchange.

Investigations by our correspondent showed that in the past few months, there have been increasing transactions by foreign investors in Nigerian shares and stocks.

At the beginning of the year, analysts had raised concerns that the growing level of insecurity in the country might affect investments by the foreign investors, but the reverse seems to be the case.

At the end of the first six months of this year, foreign investments in the NSE stood at N705.15bn, representing 60.84 per cent of total transactions in the period.

The NSE said, “Foreign Portfolio Investments increased by 31.59 per cent from N89.67bn in January 2014, to N118bn in June 2014. This was just as domestic investors ceded about 4.64 per cent of trading to foreign portfolio investors as domestic transactions decreased from 50.72 per cent to 48.87 per cent over the same period.”

Between January and March 2013, the foreign transactions on the NSE totalled N217.57tn, representing 42.7 per cent of the total N510.1bn worth of transactions recorded in the three months under review.

The April to June period in the same year witnessed a total of N365.07bn worth of foreign transactions, bringing the total investment by foreign investors as of June 2013 ending to N582.64bn.

A breakdown of the NSE data made available to our correspondent on Friday by the NSE showed that the lowest transactions by foreign investors occurred in January this year, as N89.67bn was invested by foreign investors that month.

In February, N136.28bn was invested by the foreigners, while N130.55bn was staked March 2014.

The data showed that in the months of April and May, N138.79bn and N91.86bn was invested, while N118bn was invested in June, bringing the total to N705.15bn as of the first half of the year.

The amount is almost twice N453.91bn invested by domestic investors for the same period.

The Chief Executive Officer, NSE, Mr. Oscar Onyema, confirmed that the foreign investors were showing increasing interest in the Nigerian market, notwithstanding the security challenges and other issues affecting the economy.

This, he noted, was as a result of various steps taken by the market regulators to ensure that investments were protected.

He explained that while the improved regulatory environment had impacted the market positively, retail investors were not as active as they were before the financial crisis.

“We have seen strong and improved participation from foreign investors and local institutional investors, but local retail investors are not as active as they used to be,” Onyema said.

He said that the NSE was trying all it could to ensure that domestic investors also showed matching interest in the market.

“In line with one of our core strategic pillars for enhanced market performance and growth, that is instituting a strong investor protection framework, we have reconstituted the Board of Trustees for the Investor Protection Fund to protect local investments,” he said.

The Chief Executive Officer, Lambert Trust and Investment Limited, Mr. David Adonri, explained that although foreign portfolio investors still dominated the market, domestic investors were also participating.

“It is not that we are not having domestic investors coming in, it’s just that we have more FPI coming in, and this is a good situation for us and for our market,” he said.

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