N483bn Withdrawn From Stock Market by Foreign Investors

According to data, foreign portfolio investors staked N389.06bn on equities on the NSE between January and August, compared to N390.59bn spent on equities in the corresponding period of last year.
Data gotten from exchange revealed that foreign portfolio investment outflow from the Nigerian Stock Exchange amounted to N482.91bn in the first eight months of the year.
According to the Exchange, the FPI outflows include sales transactions or liquidation of portfolio investments through the stock market.
The N482.91bn withdrawn by the foreign investors between January and August represented a 35.4 per cent increase on the N356.64bn FPI outflow disclosed for the same period of 2013.The increase in the outflows comes on the back of a 0.4 per cent year-on-year drop in FPI inflow.
The growth was a marked exit from the situation in 2013 when the FPI inflow exceeded outflow. The FPI outflow accounted for 55.4 per cent of the N871.97bn total foreign transactions as of August 2014, while the FPI inflow represented 44.6 per cent of total inflow.
Mr. Bismarck Rewane the Chief Executive Officer, Financial Derivatives Company, said that elections preparations and the declining oil prices were likely factors for the rise in FPI outflow.
He explained that the market gained over 40 per cent last year; this year, the market has lost about four or five per cent. So, investors that came in last year made gains; but this year, the market has been very soft.
Secondly, this is a year before elections. Thirdly, the price of oil, which is the fundamental strength of the economy, is declining.
He further disclosed that the situation is not limited to Nigeria, it is happening across the major markets. The emerging market investors, who were bringing money here, are now beginning to get better options, because the United Kingdom is about to increase interest rates. People are getting more conservative with their investments. He also added that the rise in FPI outflow was not a cause for panic.
Despite the decline in FPI inflows, foreign investors still lead the equities market in terms of participation, accounting for 57.41 per cent of total equity transactions on the NSE between January and August.