Foreign portfolio investment in the Nigerian stock market dropped by eight per cent in the first quarter of 2021 to N60.11bn from N65.27bn in the same period of 2020.
Foreign investors injected N16.73bn into the stock market in January; N23.02bn in February; and N20.36bn in March, according to the latest data from the Nigerian Exchange Limited.
The PUNCH reported last Friday that foreign and domestic investors pulled out a total of N339.06bn from the Nigerian stock market in the first three months of this year.
The data also showed that foreign portfolio investors sold Nigerian stocks worth N90.12bn in the first quarter while domestic investors withdrew N248.94bn from the market.
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 exchange (equities only).
The market capitalisation of equities fell by N230bn in Q1 2021 from N20.66tn at the end of December 2020 to N20.43tn on March 31, 2021, data from the Nigerian Exchange Limited showed.
The All-Share Index of the Nigerian Stock Exchange increased declined from 39,512.31 basis points on December 30 to 39,045.13bps at the end of March this year.
Last week, the NSE ASI and the market capitalisation appreciated by 1.36 per cent to close at 39,834.42bps and N20.85tn respectively.
Analysts at Cordros Capital Limited, in their latest weekly economic and market report, said the bulls would likely increase their positions in light of decent corporate earnings released this week.
They said, “On the other hand, the bears will look to take advantage of the two-week gains in cashing out given improving yields in the fixed income market.
“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
The then 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, he had 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.