Foreign investors dominate stock market

Foreign investors have regained their leading position in the Nigeria capital market by controlling 68.59 per cent transactions in February.

Domestic investors had, in January, dominated transactions on the Nigerian bourse with 50.72 per cent of the entire transactions.

On a monthly basis, the NSE polls trading figures from major custodians and market operators on their Foreign Portfolio Investments (FPI) indicate that foreign transaction stood at 68.59 per cent, compared with 31.41per cent of domestic.

The significant increase in FPI outflows in February compared to January and the same period last year showed that the outflows in February was about 107 per cent higher, compared to January 2014 and about 183 per cent compared to February 2013.

The statistics from the exchange showed that FPI transactions which accounted for 49.28 per cent at the beginning of the year, increased significantly to 68.59 per cent at the end of February 2014.

In contrast, domestic transactions decreased significantly from 50.72 per cent to 31.41 per cent over the same period, representing an overall increase of 9.19 per cent in total transactions, broken down into a 51.98 per cent increase in FPI transactions and a 32.37 per cent decrease in domestic transactions.

In comparison to the same period in 2013, there was a significant increase in total FPI by 45.90 per cent, whilst the total domestic transactions reduced by 46.02 per cent.

However, the FPI outflows outpaced inflows which were the reverse when compared to the same period in 2013.

Overall, there was a 3.71 per cent increase in total transactions in comparison to the same period in 2013.

According the NSE, the FPI outflow included sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow included purchase transactions on the NSE equities only.

The January 2014 and February 2013 transactions are included for comparison to the February 2014 transactions. Total FPI transactions of N616 billion accounted for 14.8 per cent of total transactions in 2007, representing 50.8 per cent of the total in 2013 and an increase of 36 per cent over 6 years period.

Domestic transactions, on the other hand, started at N3,556 billion, representing 85.2 per cent in 2007 but reduced significantly to N1.009 billion, representing 49.2 per cent of total transactions in 2013 with a sharp decline of 36 per cent in 6 years period.