Foreign Portfolio Investments in Nigerian Stock Market Surge by 180.9%
Key Highlights:
1. FPI Growth:
Foreign Portfolio Investments (FPIs) inflows into the Nigerian stock market soared by 180.95%, reaching ₦344.30 billion in the first 10 months of 2024, compared to ₦122.55 billion in the same period of 2023.
2. Outflows Also Increase:
Foreign investment outflows rose by 136.95% to ₦400.04 billion, up from ₦168.83 billion in 2023.
3. Total Foreign Transactions:
Year-to-Date (YtD) foreign transactions hit ₦744.34 billion, a 155.5% increase from ₦291.38 billion in 2023.
4. Domestic Transactions Dominate:
Domestic investors contributed ₦3.727 trillion, making up 83.35% of the total ₦4.470 trillion YtD transactions.
• Retail Investors: ₦1.91 trillion.
• Institutional Investors: ₦1.82 trillion.
5. Monthly Growth:
October 2024 transactions rose marginally by 1.97% to ₦502.73 billion compared to ₦493.01 billion in September.
Year-on-year, October transactions jumped by 127.54% from ₦220.94 billion in October 2023.
6. Foreign vs. Domestic:
Domestic investors accounted for 82% of transactions in October 2024, overshadowing foreign investors.
Why the Surge?
• Monetary Policy: The Central Bank of Nigeria’s (CBN) tough stance on inflation and consistent hikes in monetary rates attracted foreign investors.
• Economic Reforms: Analysts credit fiscal and monetary reforms for boosting investor confidence and stabilizing the Naira.
Expert Opinions
• Victor Chiazor, Fidelity Securities Limited:
“This surge in FPIs reflects improved confidence in Nigeria’s economy due to CBN’s monetary policy stance.”
• David Adonri, Highcap Securities:
“Higher FPIs positively impact the foreign exchange market by strengthening demand and supply dynamics, boosting foreign reserves.”
• Ambrose Omordion, InvestData Consulting:
“Despite higher interest rates being theoretically negative for stocks, they signal the CBN’s commitment to currency stability and inflation control.”
Implications for the Market
• Foreign Exchange: Increased FPIs support Naira stability and improve foreign reserves.
• Investor Confidence: The sharp rise in investments showcases growing trust in Nigeria’s economic reforms.
What are your thoughts on the rising FPIs and their impact on Nigeria’s stock market? Share below!
Key Highlights:
1. FPI Growth:
Foreign Portfolio Investments (FPIs) inflows into the Nigerian stock market soared by 180.95%, reaching ₦344.30 billion in the first 10 months of 2024, compared to ₦122.55 billion in the same period of 2023.
2. Outflows Also Increase:
Foreign investment outflows rose by 136.95% to ₦400.04 billion, up from ₦168.83 billion in 2023.
3. Total Foreign Transactions:
Year-to-Date (YtD) foreign transactions hit ₦744.34 billion, a 155.5% increase from ₦291.38 billion in 2023.
4. Domestic Transactions Dominate:
Domestic investors contributed ₦3.727 trillion, making up 83.35% of the total ₦4.470 trillion YtD transactions.
• Retail Investors: ₦1.91 trillion.
• Institutional Investors: ₦1.82 trillion.
5. Monthly Growth:
October 2024 transactions rose marginally by 1.97% to ₦502.73 billion compared to ₦493.01 billion in September.
Year-on-year, October transactions jumped by 127.54% from ₦220.94 billion in October 2023.
6. Foreign vs. Domestic:
Domestic investors accounted for 82% of transactions in October 2024, overshadowing foreign investors.
Why the Surge?
• Monetary Policy: The Central Bank of Nigeria’s (CBN) tough stance on inflation and consistent hikes in monetary rates attracted foreign investors.
• Economic Reforms: Analysts credit fiscal and monetary reforms for boosting investor confidence and stabilizing the Naira.
Expert Opinions
• Victor Chiazor, Fidelity Securities Limited:
“This surge in FPIs reflects improved confidence in Nigeria’s economy due to CBN’s monetary policy stance.”
• David Adonri, Highcap Securities:
“Higher FPIs positively impact the foreign exchange market by strengthening demand and supply dynamics, boosting foreign reserves.”
• Ambrose Omordion, InvestData Consulting:
“Despite higher interest rates being theoretically negative for stocks, they signal the CBN’s commitment to currency stability and inflation control.”
Implications for the Market
• Foreign Exchange: Increased FPIs support Naira stability and improve foreign reserves.
• Investor Confidence: The sharp rise in investments showcases growing trust in Nigeria’s economic reforms.
What are your thoughts on the rising FPIs and their impact on Nigeria’s stock market? Share below!