Data from the Nigerian Stock Exchange reveals that foreign portfolio investors sold Nigerian stocks valued at N30.79bn in January, 2021.
Further details showed that the foreign inflows into the stock market stood at N16.73bn in January.
Foreign portfolio investment outflow includes sales transactions or liquidation of portfolio investments through the stock market, while the FPI inflow includes purchase transactions on the NSE (equities only), according to the bourse.
The NSE, in its latest domestic and foreign portfolio investment report, said total transactions at the nation’s bourse decreased by 13.66 per cent from N269.24bn (about $687.06m) in December 2020 to N232.46bn (about $590.82m) in January 2021.
It said in January, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by about 60 per cent.
A further analysis of the total transactions executed revealed that total domestic transactions decreased by 7.21 per cent from N199.32bn in December to N184.94bn in January 2021.
“Additionally, total foreign transactions decreased by 32.04 per cent from N69.92bn (about $178.44m) to N47.52bn (about $120.78m) between December 2020 and January 2021,” the report said.
Institutional investors outperformed retail investors by 28 per cent, according to the NSE.
It also revealed that retail transactions increased by 10.16 per cent from N61.22bn in December to N67.44bn in January 2021 while adding that the institutional composition of the domestic market also decreased by 14.91 per cent from N138.09bn in December to N117.50bn in January 2021.
It said, “Total domestic transactions accounted for about 74 per cent of the total transactions carried out in 2020, whilst foreign transactions accounted for about 26 per cent of the total transactions in the same period.
“The transaction data for 2021 shows that total foreign transactions was circa N47.52bn, whilst total domestic transactions was circa N184.94bn.”
Last month, the International Monetary Fund said there was an estimated $2bn backlog of requests for foreign exchange from divestment by foreign portfolio investors of naira assets, which it said were being gradually cleared by the Central Bank of Nigeria using a combination of spot and forward allocation.
The Chief Executive Officer, NSE, Mr Oscar Onyema, at the 2020 Market Recap and 2021 Outlook in January, noted that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value while foreign portfolio investors accounted for 34.72 per cent.
On the outlook for this year, Onyema said, “We expect the marginal reopening of businesses, normalisation of the economy and revenue-diversification drive of the Nigerian government to elicit positive sentiments throughout the year.”