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Foreign Investors Control 67% of Nigerian Stock Exchange Activity, Invest N277 Billion This Year

By on October 8, 2012

NSE President, Onyeama

Foreign Portfolio Investments on the Nigerian Stock Exchange (NSE) this year has reached N277.15 billion to date.

 

The Managing Director, BGL Securities Limited, Sunday Adebola stated that the figure represents the whole value of shares traded on the floor of the Exchange by foreign portfolio investors since commencement of the year.

 

In his words, “Data from the Exchange has shown that 66 per cent of the activities in the stock market are being controlled by the foreign portfolio investors.”

 

“It has been established that N419.93 billion worth of shares have been traded on the floor of the Exchange this year alone. I want to believe that 66 per cent of these are done by the foreign portfolio investors,” Adebola continued.

 

“This translates to N277.15billion. That is what we can see in terms of what the foreign portfolio investors have done up to date,” he added.

He made clear that, the growth recorded by a capital market is dependent but not limited to the following factors, international prices of crude oil, forces of supply and demand, and the fundamentals of the quoted companies.

 

“Empirically, a study has been done that showed correlation between the oil price and stock market growth in Nigeria. If we have oil prices going up, the economy will become buoyant, more foreign investors (direct and portfolio) will show interest in the economy, and the activities in the market will pick up,” he said.

 

“We have seen a situation whereby oil prices are going up and the stock market was experiencing a downturn. But in most cases, the prices of crude oil determine the growth of other sectors of the economy,” he added.

 

He added that, in recent times, share index of various sectors have improved as well as All-Share index, market capitalization have remarkably improved compared to what was obtainable last year.

 

He added that the materialization of market makers has enhanced liquidity and deals in the market.

 

He noted that the emergence of market makers has propped up the poise of financiers who until now have relaxed.

 

He concluded by promising that interests rates would soon come down, because the monetary authorities have pledged to do that and he is confident it would give people the confidence to move to the stock market from fixed-income securities.