‘Foreign investors may dump equities ahead of elections’
Foreign investors who invested billions of dollars in equities are likely to exit the market ahead of the 2019 elections, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said yesterday.
Speaking to finance journalists in Lagos, he said the negative implication of exit of portfolio investors from the local bourse raises major concern on naira’s continued stability.
He also said there would be further external sector imbalances in a runup to 2019 elections even as equity market imbalance is likely to increase.
He said: “The development in the stock market and its closeness to campaign politics is worrisome. It raises lots of concerns on the relatively stable foreign exchange market. The investors in the stock market are largely portfolio investors from international markets and will at any given time decide to dump their holdings and take huge dollars from the economy as they repatriate both capital and their profits to other lucrative destinations.”
Gwadabe said ABCON has established the naijabdcs.com, a live rate engine room to be rolled out soon, as part of its strategy to enhance transparency, price discovery and attracting billions of dollars through Diaspora remittances.
The group is also working with the Nigeria Inter-bank Settlement System (NIBSS) to automate its operations for online real time returns rendition. Gwadabe, described the portfolio investors as capitalists driven solely by profit.