{"id":17019,"date":"2019-04-18T13:01:29","date_gmt":"2019-04-18T13:01:29","guid":{"rendered":"https:\/\/everyday.ng\/?p=17019"},"modified":"2019-04-18T13:01:29","modified_gmt":"2019-04-18T13:01:29","slug":"stock-market-lost-n94bn-in-two-months-and-foreign-investors-caused-it","status":"publish","type":"post","link":"https:\/\/everyday.ng\/?p=17019","title":{"rendered":"Stock market lost N94bn in two months and foreign investors caused it"},"content":{"rendered":"<p>By Fakoyejo Olalekan (<strong>www.nairametrics.com<\/strong>)<br \/>\nThe Nigerian stock market has lost\u00a0N94.09 billion to withdrawals made by foreign investors in the months of January and February. This surpassed the total foreign inflow in the country, as uncertainty continues to influence investors\u2019 decisions.<br \/>\nThe two months total foreign outflow is estimated\u00a0at\u00a056.7 percent of total foreign portfolio commitment in the stock market,\u00a0rising above the\u00a0foreign portfolio inflow, which stood at N71.74 billion.<br \/>\nNote the total stake of foreign investors in the market stood at N165.8 billion within the period.<br \/>\n<strong>This is the breakdown of\u00a0monthly foreign inflows<\/strong><br \/>\nAccording to available data on Foreign &amp; Domestic Portfolio Participation on the\u00a0Nigerian Stock Exchange, (NSE), the foreign outflows increased by 5.20 percent month-on-month (MoM) from N37.11 billion in December 2018 to N39.04 billion in January. In also rose by 41 percent month on month in February to N55.02 billion.<br \/>\nWhy Foreign Investors are jittery:\u00a0Analysts at\u00a0United Capital Plc\u00a0believe that the uncertainty among investors could be due to the effect of President Muhammadu Buhari\u2019s re-election on policies. In a report by the company,\u00a0themed, \u201cFPIs are selling Stocks but buying T-Bills &amp; Bonds, Why?\u201d, it was stated that foreign investors want bold policies that assure\u00a0sustainable long-term growth.<br \/>\nAlso, the analysts added that a surge in\u00a0US bond yields lured investors to buy more assets in U.S. while withdrawing from Nigeria and other\u00a0emerging and frontier markets. Note that the uncertainty surrounding election outcome could as well also influence foreign investors.<\/p>\n<blockquote><p>\u201cOVER 2018, MANY INVESTORS WITHDREW FROM EMERGING AND FRONTIER MARKETS (NIGERIA INCLUSIVE) AND BOUGHT MORE ASSETS IN THE US DUE TO THE SPIKE IN US BOND YIELDS, AS WELL AS THE APPRECIATING DOLLAR.<br \/>\n\u201cWORSENED BY ELECTION UNCERTAINTY, THE NIGERIAN EQUITY MARKET SAW A NET FOREIGN OUTFLOW TO THE TUNE OF N66.2 BILLION OVER 2018, COMPARED TO NET FOREIGN INFLOWS OF N336.9 BILLION IN 2017.\u2019\u2019<\/p><\/blockquote>\n<p><strong>2019 still looks good for more inflows<\/strong><br \/>\nAccording to analysts, this year will still record\u00a0more funds flowing back to Nigeria as elections have been concluded. But the growth of the inflow will be to an extent due to lack of\u00a0structural reform.<\/p>\n<blockquote><p>\u201cAGAINST THE BACKDROP OF A BETTER BALANCE OF RISK THIS YEAR AND CONSIDERING THE EXTREME VALUATION DIFFERENCES BETWEEN NIGERIA (9.2X) AND THE REST OF THE WORLD (FM: 11.5X, EM: 12.4X AND THE WORLD: 16.9X), 2019 SHOULD SEE MORE FUNDS FLOW BACK TO NIGERIA \u2013 ESPECIALLY AFTER ELECTIONS.<br \/>\n\u201cNEVERTHELESS, WE EXPECT ANY POTENTIAL UPSIDE TO BE CAPPED BECAUSE THE STRUCTURAL REFORM FOLLOW-THROUGH THAT CAN PUT NIGERIA ON THE PATH TO A MORE SUSTAINABLE LONG-TERM GROWTH IS MISSING.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>By Fakoyejo Olalekan (www.nairametrics.com) The Nigerian stock market has lost\u00a0N94.09 billion to withdrawals made by foreign investors in the months of January and February. This surpassed the total foreign inflow in the country, as uncertainty continues to influence investors\u2019 decisions. The two months total foreign outflow is estimated\u00a0at\u00a056.7 percent of total foreign portfolio commitment in [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":17020,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,7],"tags":[],"class_list":["post-17019","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news"],"_links":{"self":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/17019","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17019"}],"version-history":[{"count":0,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/17019\/revisions"}],"wp:attachment":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17019"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17019"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17019"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}