Data from the Nigerian Stock Exchange, NSE, showed a significant drop in foreign investors’ participation as at December 2014, while a significant increase was recorded on domestic side. During the period ended December 31, 2014, foreign investors’ participation on the NSE dropped to 48.24 percent, as against 80.92 participation rate achieved in November 2014.
On the other hand, domestic investors’ participation within the same period in December 2014 stood at 51.76 percent, as against 19.08 percent rate of participation recorded in November 2014.
However, on a year-to-year basis, foreign investors’ participation rose to 57.52 percent in 2014, as against 50.80 percent participation recorded in 2013, while domestic investors ‘participation stood at 42.48 percent between January to December 2014, compared to 49.20 percent recorded in the same period in 2013.
Also, in 2013, total foreign inflows into the Exchange exceeded outflows by about four percent, while in 2014, foreign outflows exceeded inflows by 22 percent. However, in December 2014, there were more foreign inflows than outflows.
Also the outflows in December were significantly smaller than the outflows in the previous months.
In its 2014 review and outlook for 2015, the firm said: “The local bourse performed negatively in the review period, the worst in three years. This was as a result of strong investors’ apathy towards the equities market, particularly from local investors.
“This was further exacerbated by sell offs by foreign portfolio investors in the face of local exchange rate risks and improvements in their respective economies.”
It, however stated that the negative market momentum currently being experienced would taper off towards mid 2015, adding that this would be made possible by sound policy framework from fiscal and monetary authorities.
“Given the current attractive valuation of equities, we expect a flurry of activities in the second half of 2015. An upbeat in the international crude prices and by extension, an improvement in the Nigeria’s economic environment will provide a strong support for the equities market,” analysts at Cowry Asset said.
“After two years of consecutive growth–35.45 percent and 47.19 percent in the year ended December 31, 2012 and 2013 respectively, the NSE All Share Index (NSE ASI) shed 16.79 percent of its former value on a year-to-date basis,” the report added.
