International investment in stock market rises 168% to N118.92bn
International portfolio investment, FPI, into the stock market rose by 167.8 percent, One year-on-One year (YoY), to N118.92 billion in February 2024 from N44.52 billion in the corresponding duration in 2023 buoyed by improved liquidity in the a ways off places alternate (FX) market following reforms by the Central Financial institution of Nigeria, CBN.
The Nigerian Alternate Restricted (NGX) disclosed this in its Domestic and International Portfolio Funding file for February 2024, which showed a 0.3 percentage level appreciate bigger to 11.78 per cent in half of FPI in the whole equities transaction of N1.009 trillion at some level of the duration.
Equally, the a ways off places investors’ stake rose Month-on-Month (MoM) by 23.9 percent to N65.81 billion from N53.11 billion in January 2024.
Additionally the a ways off places portfolio investors’ contribution to the whole equities transaction rose to 18.39 percent from 8.15 percent between January and February 2024.
Extra prognosis shows that One year-to-Date, YtD, FPI inflow at N40.71 billion, represents 37.9 percent of the whole a ways off places investors’ dedication, while outflow at N78.21 billion, represents 62.1 percent of the a ways off places portfolio investment.
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Funding analysts had indicated that steadiness in the a ways off places alternate market would outcome in improved FPI inflow.
David Adonri, Vice Chairman, Highcap Securities, had projected that resurgence of a ways off places investment inflow into the stock market if the Central Financial institution of Nigeria (CBN) sustain remittance of trapped funds to a ways off places investors.
He stated: “International investors’ self assurance was once severely eroded by their trapped funds in Nigeria. Many of them absorb as a outcome been sluggish for the past few years.
“Since this administration has made it a cardinal aim to positive the infamous remittances, there is a silver lining for FPIs that could encourage their return. If CBN sustains the remittance of trapped funds to a ways off places investors, more FPI could moreover open flowing on this yr and henceforth.
“International investors will invest the place they’ll transfer their capital inside and out with out hindrance. If the profitability, liquidity and safety of investment in Nigeria are assured and country distress is negligible, FPI will movement in.
Simiarly, Oluwaseun Dosumu, Head of Study, Parthian Securities, stated: “The resurgence of a ways off places investors in the Nigerian market is contingent upon the insurance policies and dynamics of the a ways off places alternate market in 2024. The preceding yr, 2023, witnessed a weakened notify of alternate price fundamentals within the Nigerian a ways off places substitute market, essentially attributed to a decline in a ways off places alternate supply.
“With the anticipation of an enhancement in supply at some level of the yr, there is a seemingly for a modest upturn in a ways off places portfolio investment in the Nigerian Alternate.”