Foreign Investors Exit Nigerian Stock Market: Outflow Surpasses Inflow by 12.2% YTD
The participation of foreign investors in the Nigerian stock market has seen a significant decline, with foreign outflows exceeding inflows by 12.2% Year-to-Date (YTD) as of November 2024, according to the latest data from the Nigerian Exchange Limited (NGX).
Key Highlights
• Foreign Transactions (YTD):
• Outflows: ₦415.13 billion
• Inflows: ₦370.15 billion
• Month-on-Month (MoM) Decline in Foreign Portfolio Inflows:
• November inflows: ₦25.85 billion
• October inflows: ₦33.31 billion
• Decline: 22.4%
• Foreign Outflows (MoM):
• Increased by 6.6% to ₦15.09 billion in November (from ₦14.15 billion in October).
• Total Market Transactions:
• Declined by 12% MoM to ₦442.34 billion in November (from ₦502.73 billion in October).
Domestic vs. Foreign Contributions
• Domestic Investors: Accounted for 82% of total transactions in November.
• Institutional Investors:
• Dropped by 27.8% MoM, from ₦285.23 billion in October to ₦206.02 billion in November.
• Retail Investors:
• Increased by 14.9% MoM, from ₦170.04 billion to ₦195.38 billion.
• Foreign Investors: Represented 9.3% of total transactions, with a 13.7% decline in gross foreign transactions, dropping to ₦40.94 billion in November (from ₦47.46 billion in October).
Why the Decline?
Market analysts attribute the reduced participation of foreign investors to several factors:
• Attractive Fixed-Income Yields: The high yields from debt securities have drawn attention away from equities.
• Geopolitical Tensions: Ongoing uncertainties have constrained foreign portfolio investment (FPI) activity.
Analysts’ Outlook
According to Cordros Research, domestic investors are expected to dominate market activities due to their higher participation rates. However, overall buying activity may remain subdued owing to:
1. Elevated Fixed-Income Yields.
2. Continued geopolitical uncertainties impacting foreign inflows.
This trend underscores a shift in market dynamics, with domestic retail investors stepping up while foreign investors retreat. The Nigerian stock market faces new challenges as it navigates these changes.
#NigerianStockMarket #Investing #MarketTrends
The participation of foreign investors in the Nigerian stock market has seen a significant decline, with foreign outflows exceeding inflows by 12.2% Year-to-Date (YTD) as of November 2024, according to the latest data from the Nigerian Exchange Limited (NGX).
Key Highlights
• Foreign Transactions (YTD):
• Outflows: ₦415.13 billion
• Inflows: ₦370.15 billion
• Month-on-Month (MoM) Decline in Foreign Portfolio Inflows:
• November inflows: ₦25.85 billion
• October inflows: ₦33.31 billion
• Decline: 22.4%
• Foreign Outflows (MoM):
• Increased by 6.6% to ₦15.09 billion in November (from ₦14.15 billion in October).
• Total Market Transactions:
• Declined by 12% MoM to ₦442.34 billion in November (from ₦502.73 billion in October).
Domestic vs. Foreign Contributions
• Domestic Investors: Accounted for 82% of total transactions in November.
• Institutional Investors:
• Dropped by 27.8% MoM, from ₦285.23 billion in October to ₦206.02 billion in November.
• Retail Investors:
• Increased by 14.9% MoM, from ₦170.04 billion to ₦195.38 billion.
• Foreign Investors: Represented 9.3% of total transactions, with a 13.7% decline in gross foreign transactions, dropping to ₦40.94 billion in November (from ₦47.46 billion in October).
Why the Decline?
Market analysts attribute the reduced participation of foreign investors to several factors:
• Attractive Fixed-Income Yields: The high yields from debt securities have drawn attention away from equities.
• Geopolitical Tensions: Ongoing uncertainties have constrained foreign portfolio investment (FPI) activity.
Analysts’ Outlook
According to Cordros Research, domestic investors are expected to dominate market activities due to their higher participation rates. However, overall buying activity may remain subdued owing to:
1. Elevated Fixed-Income Yields.
2. Continued geopolitical uncertainties impacting foreign inflows.
This trend underscores a shift in market dynamics, with domestic retail investors stepping up while foreign investors retreat. The Nigerian stock market faces new challenges as it navigates these changes.
#NigerianStockMarket #Investing #MarketTrends