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Foreign investments in stocks now N801bn — NSE

By BusinessNews Staff on November 8, 2013

The total amount of money spent by foreign investors on Nigerian securities between the first and the third quarters (January to September 2013) of this year stands at N801.25bn.

This amount comprises the inflows and outflows of Foreign Portfolio Investments for the period under review.

Statistics provided by the Nigerian Stock Exchange and calculated by our correspondent on Friday showed that between January and March 2013, the foreign transactions totalled N217.57bn, representing 42.7 per cent of the N510.1bn worth of transactions recorded in the first three months of the year.

For April to June, a total of N365.07bn worth of foreign transactions was recorded, while for the months of July to September the total amount of FPIs in the NSE stood at N218.61bn.

The amount invested between July and September was significantly higher than the N217.57bn that was recorded at the end of the first quarter in March.

This means that the FPI transactions which started at 36.9 per cent at the beginning of the year, increased to 49.9 per cent at the end of September 2013 representing an increase of 13 per cent.

The report put the total inflows of FPI for the month of September at N26.14bn, representing a decline over N31.12bn in inflows recorded at the end of August. The total outflow in September was N27.88bn, lower than N39.76bn recorded in July 2013.

The FPI represents the passive holdings of securities and other financial assets, which may not entail active management or control of the securities’ issuer. It is usually positively influenced by high rates of return and reduction of risk through geographic diversification.The return on FPI is normally in the form of interest payments or non-voting dividends.

Chief Executive Officer of the NSE, Mr. Oscar Onyema, said foreign investors had continually been showing interest in the Nigerian market due to the various reforms carried out in the exchange in the last few years.

He added that the reforms had impacted positively on the market thereby attracting foreign investors who were usually on the watch for strong emerging markets to invest in.

He said, “Increasingly, these visitors are drawn to Nigeria for leisure and business purposes and, there is great potential for expanding the numbers. Indeed, most of the visitors have established Nigeria as a leading destination for business, investment and human capital for both local and foreign clients.

“Last year, the NSE recorded a 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.”

The Executive Director Market Operations and Technology at the Exchange, Mr. Ade Bajomo, said with recent efforts by the regulators to improve the trading platform, there were pointers to show even more participation by foreign investors in the coming months.

He said, “The NSE seeks to transform its electronic trading environment through the use of innovative trading technologies.

“With the inauguration of our new trading platform, the X-GEN and market data initiative, the adoption of the Financial Information Exchange Protocol has become necessary to position the Nigerian bourse favourably within the financial global village.”

He added that this was an essential tool that would facilitate the growth of online trading for retail investors using their smart phones and any other computing device to trade transparently and easily from anywhere and anytime, thereby improving the experience of doing business in the Nigerian capital market.

[Punch]

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