Equity Market ‘Too Big To Be Ignored By Foreigners’ – Onyeama
The Nigerian Stock Exchange recorded inflows of over $4.5 billion inflow from foreign investors in the first eleven months of 2012. So far this year, the market’s capitalization has appreciated by over N700 billion.
Analysts and observers alike expect this to be another bumper year of profits for the Nigerian Stock Exchange, but the million dollar question is, “will the local retail investors key in to the opportunity?”
Proshare CEO, Olufemi Awoyemi says, “We can say that the exchange rate regime makes it attractive for foreign investors to move some of their portfolio into Nigeria at this point. However, government and the regulators have to do more to strengthen local participation in the market.
“If states cannot raise bonds because of the price/cost of government borrowings in the bond and treasury bills market, and if stockbrokers and retail investors cannot access margin or business loans to purchase stocks, then local participation cannot increase in the market.”
Still on the matter of theremarkable performance of the market and its attendant opportunities, the CEO of the NSE, Oscar Onyeama said, “Last year, the NSE recorded local participation of 44 per cent, while foreign participation accounted for 56 per cent of activities in the same year. The rally we saw in the market in 2012 was on the back of foreign investments.
“It is also good that our local investors have started to return to the market and we are very hopeful that we will see more of this in 2013. We at the Exchange are hopeful that the market will pick up further this year.
“It is important to state here that the Nigerian stock market has been cleaned up to give good returns to foreign investors and our market is too big to be ignored by foreign investors who are looking to take advantage of the opportunities offered by the African market and other emerging economies. This is what has kept these investors.”