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Nigeria: Foreign investors dominate transactions at Nigerian bourse

Foreign investor’s participation in the Nigerian bourse from January to April 2014 hit 75.25%, compared with their local counterparts whose participation dropped to 26%, PANA reported Monday, quoting statistics from Nigerian Stock Exchange (NSE).

Compared to the same period in 2013, the statistics showed that local investors’ participation fell from 35.52%, while foreign participation rose from 64.48% to their current positions.

The NSE statistics also showed that out of 184.43 billionnaira transactions posted during the period (January-April), foreign investment inflow into the exchange through Foreign Portfolio Investors (FPI) accounted for 138.78 billion naira (about $0.89 billion).

On the other hand, total domestic transactions stood at 45.64 billion naira, against 67.73 billion naira in the same period in 2013.

Speaking on the NSE statistics, Cowry Asset Management Company, in its latest review of the Nigerian economy, noted that foreign portfolio investors will continue to dominate transactions due to its attractiveness over other emerging markets.

The firm noted, however, that the local bourse was still faced with a lot of challenges, particularly in the first quarter that led to investors’ adopting a cautious approach to investing.

Some of these hitches included the initial reactions of investors to the ouster of former Central Bank of Nigeria (CBN) Sanusi Lamido Sanusi by the President.

The untimely exit of Sanusi, the report noted, created uncertainties over sustainability of the laudable monetary policy reforms he introduced in 2010, when he became the apex bank boss.

“Other challenges included uncertainties over the ability of commercial banks to respond profitably and robustly to the sharp increase in public sector cash reserve ratio requirement from 50 percent to 75 percent,” the company’s report said.

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