Foreign Investors’ Inflow into Stock Market Drop to N13.52bn Over Political Tension

Kayode Tokede

Foreign investors inflow in stock market of the Nigerian Exchange Limited (NGX) dropped to N13.52billion between January and February 2023, attributable to political tension and high inflationary pressure.

This is against N38.96billion foreign investors inflow in the stock market in the same period of 2022.

The NGX in its monthly report titled, “domestic & foreign portfolio participation in equity trading,” revealed that foreign investors outflow decreased to N31billion between January and February 2023 when compared to N69.84 between January and February 2022.

 The report revealed that the stock market in the first two months of 2023 witnessed sluggish exposure of domestic and foreign investors as N384.01billion transactions was carried as against N506.94billion first two months of 2022.

Domestic investors still dominate the stock market, controlling 88.41 per cent transactions, while foreign investors stood at 11.59per cent.

The report for the month of February showed that total transactions at the nation’s bourse decreased by 3.17 per cent from N195.10billion (about $422.94million) in January5 2023 to N188.91billion (about $409.72million) in February6 2023.

According to the report, “The performance of the current month when compared to the performance in February 2022 (N183.56billion) revealed that total transactions increased by 2.91per cent.

“In February 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 80per cent.

“A further analysis of the total transactions executed between the current and prior month (January 2023) revealed that total domestic transactions decreased by 0.53per cent from N170.20billion in January to N169.29billion in February 2023.

“However, total foreign transactions decreased more significantly by 21.20per cent from N24.90billion (about $53.98million) to N19.62billion (about $42.51million) between January 2023 and February 2023.”

Over a 16 year period, the report disclosed that domestic transactions decreased by 45.30per cent from N3.556trillion in 2007 to N1.945trillion in 2022 whilst foreign transactions also decreased by 38.47per cent  from N616bn to N379billion over the same period.

“Total domestic transactions accounted for about 84per cent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16per cent of the total transactions in the same period.

“The transaction data for 2023 shows that total domestic transactions are circa N339.49billion, whilst total foreign transactions are circa N44.52billion,” the report added.