Foreign portfolio investment drops to 65 billion naira in 3 months

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By Chinwendu Obienyi

Foreign The Nigerian securities market portfolio fell to 65.08 billion naira in the second quarter (Q2) of 2022, its lowest level in recent times, amounting to 12 million dollars.

According to the Domestic and Foreign Portfolio Investment (FPI) reports for April, May and June 2022 respectively, foreign capital inflows are the value of inward direct investment by non-resident investors in the reporting economy, including reinvested earnings and intra-company loans, net of capital repatriation and loan repayments.

April 2022 saw foreign flows hold up at 15.02 billion naira, while outflows stood at 12.06 billion naira. For the months of May and June 2022, foreign inflows amounted to 25.53 billion naira and 24.53 billion naira.

Meanwhile, recorded foreign outflows in May and June 2022 stood at N19.77 billion and N17.56 billion respectively. According to the second quarter 2022 capital imports data from the National Bureau of Statistics (NBS), total capital imports into the country increased to $1.53 billion from $875 million in the same period last year. last year.

Nigeria has seen a decline in capital imports since 2020 following the unwinding of the apex bank’s open market operations policy which offered higher interest rates in exchange for foreign investors’ dollars.

Capital inflows have also worsened following the global COVID-19 related lockdowns which triggered large capital outflows out of emerging markets. But while other sectors have improved, albeit gradually, foreign portfolio investment in equities has deteriorated as investors steer clear of the Nigerian stock market.

In the first quarter of 2022, foreign admissions fell to $31.8 million from $206 million in all of 2021.

Commenting on the development, Nairametrics analysts recalled that total REIT inflows into the country since 2020 stood at over $1 billion, compared to $1.9 billion recorded in the third quarter of 2017 alone.

“The apathy of foreign investors for Nigerian stocks confirms that trading on the country’s stock market is largely domestic. In the past, foreign investors have driven investment inflows into the country, with their money directly correlated to the rise or fall of the All-Share Index (ASI). However, equities have performed relatively well over the past three years and domestic investors have dominated stock trading on the exchange.

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