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Tag: foreign investors

  • Nigeria receives more than 100 foreign investors in seven months – NIPC

    Nigeria receives more than 100 foreign investors in seven months – NIPC

    The Executive Director, Nigerian Investment Promotion Commission (NIPC), Mrs. Uju Baba, said yesterday that more than 100 foreign investors visited the country within the last six months.

    Speaking in an interview with the News Agency of Nigeria (NAN) in Abuja, Mrs. Baba described Nigeria as an investment destination in Africa.

    She, however, said that the investment business was slow, adding, “because we are going through post election period, government activities have slowed down to certain extent and that affects the investment climate.

    “Many investors are coming on exploratory visits to find out what Nigeria can offer to them. So, from June to December 2015, we received more than 100 exploratory visits,” she stressed.

    She said that since the appointment of ministers by President Muhammadu Buhari, the country had received different set of investors.

    “They are no more on exploratory visit, they are coming to the commission to facilitate meetings with the various sectors and ministries,” Baba said.

    He said the investors had confidence in the country’s investment climate despite the challenges they may encounter.

    The director called on the investors to go through the commission for proper legal framework as the present administration was more concerned with rule of law and due process.

     

  • Foreign investors bid for stakes in May & Baker

    Foreign investors bid for stakes in May & Baker

    Some foreign investors and the directors of May & Baker Nigeria Plc have started preliminary talks on the possible acquisition of strategic equity stake and technical partnership in May & Baker Nigeria as the Nigerian healthcare company seeks to leverage on its World Health Organisation (WHO)-certified pharmaceutical manufacturing complex to attain local dominance and attract global drug contracts.

    A top management source in the know of the foreign investment and partnership discussions said there were about two or three prospective foreign investors and technical partners under consideration, although no definitive and material agreements have been reached.

    Listing requirements at the Nigerian Stock Exchange (NSE), where May & Baker Nigeria Plc is listed, requires quoted companies to provide any material information on possible changes that may impact shareholding structure, balance sheet and earnings.

    The source said the exploratory talks have made good progress and the evaluated interests appeared to be strong and could lead to tangible decisions and announcements in the first half of 2016.

    The source said the directors of May & Baker Nigeria had clearly defined that any foreign investor must not only be willing to provide amenable capital to support the operations of the company but also the technical know-how to enhance the current drive to make May & Baker Nigeria’s multi-billion naira, WHO-certified pharmaceutical manufacturing complex in Ota, Ogun State, the hub of pharmaceutical manufacturing in sub-Saharan Africa (SSA).

    According to the source, the board of May & Baker Nigeria wants to deepen the company’s local product manufacturing by entering into technical partnership with foreign companies to produce specialize drugs in Nigeria for the domestic and regional markets.

    The foreign investment deal may come as part of a combined bid to raise equity funds for May & Baker Nigeria, which has been encumbered by financial leverage that arose from bank loans taken to finance the Ota manufacturing complex, otherwise known as The Pharma Centre. Already, the board of directors of the company has secured shareholders’ approval to raise N3.2 billion in new equity fund. The board has already indicated that the new equity raising will include a rights issue, to compensate shareholders who have stood by the company.

    Investors’ interests in May & Baker Nigeria have increased in recent months as the pharmaceutical company  completed a major stage of its WHO certification and pre-qualification process with the issuance of the WHO’s current General Manufacturing Practice (cGMP) to the company. May & Baker Nigeria is one of two quoted companies that had received the high-profile certification.

    The company is currently in the process of completing the pre-qualification of its products The Pharma Centre, which will enable it to export its products globally and to also participate in multi-billion Naira donor-funded drug manufacturing and supply contracts in Nigeria. It will also be able to undertake global contract manufacturing for other global pharmaceutical companies.

     

     

     

     

     

  • Protecting local, foreign investors’ interests

    The new managers of the economy need to take another look at heavy fines given  to key private sector operators by regulatory bodies.

    This becomes crucial as the high cost of doing business in Nigeria is also a major challenge to both private sector operators and potential foreign investors.

    Therefore, the new managers of the economy need to act in earnest before local and foreign investors begin to see the trend as a deliberate ploy by government to shore up its revenue base as oil prices continue to fall in the global market.

    Before it gets out of hand, the Federal Government should be reminded that businesses left Lagos State in droves and relocated to other states and neighbouring countries when the state government, in the past, tried to increase its internally generated revenue by ensuring that operators in the private sector pay all manner of taxes and fines.

    The state had adopted this method when the Federal Government decided to withhold part of its monthly federal allocation over a disagreement on the creation of additional local governments (LGAs) by the state.

    The huge fines placed on minor infractions like traffic offences or major ones like failure to remit taxes due to the state caused some uproar at the time but the state insisted on having its way. Some companies had to move out of the state and that depleted state revenue earnings at that time.

    At the federal level, the consequence of ongoing rise in regulatory fines is bound to carry a bigger cost. The similarity in the condition of the finances of the Federal Government today and that of the Lagos State Government between 2004 and 2007 implies that the current spate of huge fines may not be mere coincidence.

    It may be a grave miscalculation for the Federal Government to believe it can duplicate the survival strategy adopted in Lagos State when the state’s monthly allocations were withheld by the Federal Government under former President Olusegun Obasanjo .

    Instead, Nigeria’s economic managers must recognise that burdensome regulatory environment is anathema to the emergence of a stronger private sector.

    Undoubtedly, businesses will only thrive in an environment where salutary regulatory controls are in place. But the parallel between the timing of huge fines on businesses by regulatory bodies and the experience of businesses in Lagos State about a decade ago brings to mind the suggestion that the fines may be an ingenious bid to survive the dispensation of tight fiscal policy and diminishing budgetary funding from the federal purse.

    The huge civil penalty of N100 million slammed on Coca-Cola Nigeria by the Consumer Protection Council (CPC) in 2014 caught many unawares and set the stage for the current spate of huge fines. The penalty was seen as heavy-handed even by CPC standard.

    Since Nigerians were not informed whether Coca Cola Nigeria paid the hefty fine or not, it seems other regulatory bodies were emboldened by the development.

    Recently, the Financial Reporting Council (FRC) fined Stanbic IBTC Bank N1 billion and requested that the Central Bank of Nigeria (CBN) and the Economic and Financial Crime Commission (EFCC) investigate the bank and KPMG Professional Services for “financial misstatements” in the lenders 2013 and 2014 accounts.

    The Council also suspended the registration of four directors of Stanbic IBTC and that of its audit engagement partner, KPMG Professional Services, until KPMG’s innocence is ascertained. The four directors suspended are Atedo Peterside, Sola David-Borha, Arthur Oginga and Dare Owei.

    The Nigerian Communications Commission (NCC) also imposed a N1.04 trillion fine on MTN Nigeria for failing to disconnect 5.2 million unregistered SIMs on its network. The CBN equally imposed a N4 billion fine on Skye Bank Plc; N1.87 billion fine on First Bank of Nigeria and N2.94 billion fine on United Bank for Africa for their alleged failure to comply with the regulator’s directive on Treasury Single Account (TSA). All the banks have paid the fines.

    Another major player in the private sector, Guinness Nigeria Plc, joined the rank of multinational victims of regulatory fines as it was fined N1 billion by the National Agency for Food and Drug Administration and Control (NAFDAC).

    Guinness Nigeria Plc said the alleged regulatory infraction relates, in part, to the destruction of expired raw material without the authority and supervision of NAFDAC.

    Diageo, owners of Guinness, said it did not fully understand the basis for the fine, nor the particular regulations infringed but was in talks with NAFDAC to resolve the matter.

    Curiously, a review of the NAFDAC Act shows that the highest penalty that it can charge for the infraction against Guinness Nigeria is N100, 000 per infringement.

    If this is so, does it then mean that Guinness Nigeria committed 10,000 infringements before NAFDAC decided to act? This is most unlikely. NAFDAC, like other regulatory agencies, must understand that multinational companies play by a different set of rules and except where the Chief Executive Officer is criminally inclined, they subscribe to a strict code of corporate governance.

    It is incontestable that the contribution of the private sector to the growth of the economy may be affected if regulators become overbearing and are left unchecked.

    Nigeria must avoid a situation whereby major business concerns that are engaged in legitimate dealings would begin to wonder who is next in line for huge sanctions by regulatory bodies.

     

    • Okoya, a former executive editor of Marketing Edge, lives in Lagos.

     

  • Lagos ready for foreign investors, says Ambode

    Lagos ready for foreign investors, says Ambode

    Lagos State Governor, Mr. Akinwunmi Ambode, has reaffirmed his administration’s commitment to strengthening trade relationship with Indian investors.

    He spoke while receiving Indian High Commissioner to Nigeria, Mr Ajjanpor Ghanashyam in his office in Ikeja.

    The governor, spoke of his administration’s determination to further strengthen the trade with the country, adding that he has created an Office of the Overseas Affairs and Investment, which is under his supervision, to make the state more investor-friendly.

    He said: “We have established the Office of Overseas Affairs and Investment, so that we can strengthen bi-lateral relationship. We need more investors to invest in Lagos so that we can create employment and grow our GDP. Whatever it is you think we can do to increase investors from India, we are ready for discussion.”

    The governor expressed his appreciation to the visitors, saying that Lagos could draw inspiration from India as a modern democracy and from the way the economy was conducted despite its huge population.

    He assured the High Commissioner that the state is ready to expand its frontiers to accommodate investors willing to set up their businesses in the state.

     

     

  • Saudi Arabia opens $585b stock market to foreign investors

    Saudi Arabia’s stock market, valued at $585 billion, opened up to direct foreign investment for the first time on Monday, as the kingdom seeks an economic boost amid low global oil prices.

    The opening of the Tadawul Saudi Stock Exchange allows companies, particularly those that are not in the oil business, to raise money straight from foreign investors, with the goal of expanding businesses, diversifying the economy and creating more jobs for the kingdom’s growing population. Before Monday, foreigners only could access the market indirectly, through a local Saudi institution, which was costly and complicated.

    The stock exchange’s estimated value makes it the biggest in the Middle East. Petrochemical firms make up a fifth of Tadawul, with heavyweights like Saudi Basic Industries Corp. among those listed.

    Associated Press reported that the move comes at a crucial time for Saudi Arabia, whose revenue has suffered from a plunge in oil prices over the past year. That lower revenue could constrain government spending, which in turn would affect the many companies relying on government projects. The kingdom has been drawing from its robust foreign reserves to maintain spending.

    An influx of foreign money could “help to plug some of the external shortfall and slow the pace at which Saudi Arabia is drawing down its reserves,” says the London-based analysis firm Capital Economics.

    The firm says Saudi Arabia has been traditionally cautious about foreign influence in its political and economic affairs. Its decision to open its stock market could be seen as part of a broader liberalization effort in the kingdom’s economy. The socially and religiously ultraconservative country is already awash in some of the world’s biggest brands and many multinational companies have their factories and facilities there.

    However, foreign investors say they are taking a cautious approach and warn not to expect an immediate rush of foreign investment into the Middle East’s biggest market.

    “In the immediate to short term, the money flow will be gradual,” says Sachin Mohindra, Gulf portfolio manager for Invest AD.

    One reason for the cautious approach: When local investors anticipated the opening of the market, they bid up stock prices, leaving them overvalued in the opinion of fund managers.

    Additionally, there are regulations in place for foreign investors. Only financial institutions with $5 billion or more of assets under management that have been in operation for five or more years are eligible to invest, though the regulator says it could make exceptions.

    Other regulations are that qualified foreign investors cannot own more than 5 percent of the shares of any company. These investors as a whole cannot own more than 20 percent of shares in the roughly 165 listed companies.

    There are also five companies that will be off limits to foreign investors. Most are in construction in the Muslim holy cities of Mecca and Medina, which are closed to non-Muslims.

    The kingdom’s stock market regulator, the Capital Markets Authority, says the decision to open the market to direct foreign investment is aimed at supporting increased participation of institutional investors and reducing the role of smaller investors.

    According to Tadawul, Saudi individuals make up 34.4 per cent of stock market ownership, but account for nearly 90 percent of trading activity. That has exposed the market to volatility.

    John Sfakiankis, Middle East director based in Riyadh at emerging markets investment firm Ashmore Group, says he does not expect a big influx of foreign investment right away. He expects a gradual flow over the next few years of $20 billion to $25 billion.

     

  • Foreign investors set to finance $8b IPMAN refinery

    Foreign investors set to finance $8b IPMAN refinery

    Foreign investors have indicated interest in  financing the construction of the estimated $8billion refinery being proposed by the Independent Petroleum Marketers Association of Nigeria (IPMAN), it was learnt yesterday.

    But the major snag, which the association wants the Federal Government to remove before kick-starting the project, is unnecessary bureaucracy and insecurity in the country.

    IPMAN’s Vice President,  Alhaji Abubakar Dankingari, who made this known to The Nation in Abuja, said the association has already secured a land for the project in Kogi State .

    “The way we (IPMAN) want the Federal Government to assist us in building the refinery is not money, or cash. All that we want the government to do for us is to give us a proper relationship in such a way that we can call our foreign investors. Our foreign investors are ready to sponsor this and construct this refinery for us.

    “Just what we need is the security of the country, then the relationship between the government and our partners.  That is just what we need from the government.“

    He said the proposed modular  refinery which  can refine between 100 to 10, 000 barrels of crude per day could also provide employment for over 1,000 Nigerians.

    The Vice Chairman said upon the completion of the construction, the refinery will source crude oil from PortHarcourt and Calabar.

    On the fuel scarcity in the country, he  urged the Federal Government to repair the four national refineries, or construct some modular refineries within them since they all have large expanse of land.

    Dankingari said : “Since we have four refineries, the government should intervene to repair those refineries or they should do modular refineries inside the refineries if they find out that repairing the old ones will gulp huge amount of money without success, a modular refinery can be constructed inside refineries like ours that have large hectares of land.”

    He said the Department of Petroleum Resources (DPR) already in its last week meeting, has  pledged its support for private investors to freely participate in the construction and ownership  of refineries.

    The DPR told us that it will allow us to participate freely and get license and support from the government as quickly as possible, he said.

  • No restriction on foreign investors repatriating funds, says CBN

    The Central Bank of Nigeria (CBN) has said it will not impose any restriction on the financial market’s regime of “free entry, free exit”, allying fears that the pressure from declining foreign reserves and devaluation of Naira might force the government to impose capital control measures.

    Foreign investors account for about 53 per cent of transactions on the stock market with transactions valued at more than N1.5 trillion in 2014.

    Concerns about political, currency, fiscal and monetary risks, among others, have seen a spike in foreign outflows. The resultant pressure on foreign exchange has exacerbated the depreciation of the Naira.

    But the CBN said in spite of the pressure, the apex bank would not resort to imposition of capital control, which last vestiges were removed in 2009.

    CBN Governor, Mr. Godwin Emefiele, said capital control is not an option in the bank’s fiscal and monetary management.

    According to him, Nigeria wants to maintain its status of a “free entry, free exit” market, where foreign investors will not be impeded in their legitimate decisions to invest their funds in the country and also to take profits, repatriate their dividends and capital gains or outright divestment.

    Emefiele was asked to respond to the question on capital control by President Goodluck Jonathan during the interactive session with stakeholders in the capital market at the Nigerian Stock Exchange (NSE). President Jonathan indicated that the Federal Government would not interfere with such position of the apex bank, noting that regulatory agencies are in the position to take the best decisions on their areas of control.

    The CBN Governor pointed out that the preponderance of foreign investors in the stock market was a reflection of the foreign investors’ appreciation of the flexibility of the market, among other factors.

    While acknowledging the continuing pressure on the foreign exchange and the decline in foreign reserves, Emefiele reiterated that capital control would not be an option for the government.

    Naira-Dollar exchange rate closed weekend at about N200/$1. Nigeria’s foreign exchange reserves had fallen to $30.87 billion on March 4, a decline of 9.04 per cent from $33.94 billion recorded a month earlier.

    Foreign investors had taken out more than N154 billion in portfolio investments in 2014 as concerns over Nigeria’s risk profile saw many foreign investors opting for the sideline in spite of the attractive valuations of Nigerian equity investments.

    The latest Foreign Portfolio Investment (FPI) report of the NSE showed that Nigeria recorded a foreign portfolio investment deficit in 2014 as against surplus recorded in 2013. The report, obtained at the weekend, indicated that Nigeria recorded negative net foreign portfolio position of N154.14 billion in 2014 as against a positive net position of a modest N20.48 billion in 2013.

    The NSE report is regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers. Nigeria  operates a mono stock exchange, which makes the NSE the sole gateway to the nation’s stock market and the NSE’s benchmark indices, the country indices for Nigeria.

    The NSE report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The 12-month report showed that foreign portfolio outflow was N846.53 billion as against inflow of N692.39 billion in 2014, representing a net deficit of N154.14 billion. In 2013, total foreign inflow stood at N531.26 trillion compared with outflow of N510.78 trillion, leaving a positive balance of N20.48 billion.

    The report showed a notable spike in foreign transactions, although the negative colouration indicated that the propensity was towards divestment rather than investment. Total foreign transactions rose by 52.5 per cent to N1.54 trillion in 2014 as against N1.01 trillion in 2013.

    Meanwhile, foreign investors remained the dominant bloc at the Nigerian stock market. Foreign transactions accounted for 52.52 per cent of total transactions in 2014 while domestic investors accounted for 42.48 per cent. In 2013, foreign investors had accounted for 50.80 per cent while Nigerian investors accounted for 49.20 per cent. Domestic investors traded N1.137 trillion in 2014 as against N1.009 trillion in 2013.

    Market analysts said investors were anxious about Nigeria’s macroeconomic and monetary outlook in the light of the declining global oil prices and rising economic risks. They also cited the increasing political risk. However, analysts were positive on the outlook for the Nigerian market noting that the attractive valuation, resilience of the market fundamentals and the commitment of the government to pull through the global crude oil price challenge.

     

  • Foreign investors worry over exit point

    Foreign investors worry over exit point

    Foreign investors in Nigeria are concerned that measures taken by the central bank to prevent speculation against the falling naira will hinder their ability to sell investments in the country.

    “The reality is that if you have $100 million dollars invested in Nigeria, in the current environment it would probably take you a year to source that foreign exchange,” Samir Gadio, head of African strategy at Standard Chartered Plc, said by phone from London. “Some people would argue that the lack of foreign-exchange liquidity these measures cause could implicitly be compared to capital controls, although they’re not formally.”

    The Central Bank of Nigeria issued a circular on its website yesterday that any dollars bought from banks in the interbank market had to be used within 48 hours or sold back to the Abuja-based regulator. This followed a rule that cut banks’ maximum foreign-exchange net-open position at the end of each business day to zero from 1 percent of shareholder funds, which brought trading to a near halt.

    Bloomberg reported that the naira gained 0.7 percent to 183.55 per dollar as of 1:52 p.m. in Lagos. There were only six trades between 7 a.m. and 12:30 p.m., compared with almost 700 in the same period a week earlier, according to data compiled by Bloomberg. The currency has slumped 11 percent this quarter as Africa’s biggest oil producer, which derives 95 percent of export earnings from the commodity, struggles to deal with Brent crude prices collapsing to about $60 a barrel from over $111 in June.

    The central bank’s measures are temporary and investors can still enter and exit Nigeria “very freely,” Ibrahim Mu’azu, a spokesman for the regulator, said.

    “These measures are not capital controls,” Mu’azu said by phone from Abuja. “When the market stabilizes, they can be reversed.”

    The central bank could be forced to devalue its target exchange rate of 168 naira per dollar, plus or minus 5 percent, before elections in February, according to Ridle Markus, an Africa strategist at Barclays Plc’s Absa Capital unit.

    “Our estimates show that Nigeria loses potential average annual export proceeds of $740 million for every one dollar decline in oil prices,” Markus said by phone from Johannesburg. “That’s huge. The extent of foreign-exchange measures isn’t a surprise. It suggests the risk of devaluation has increased given the low oil prices. They’d want to avoid that for now, but I think it’s unavoidable.”

  • Foreign investors stake N495b on Nigerian equities

    Foreign investors stake N495b on Nigerian equities

    Foreign investors staked more than N495 billion on Nigerian equities in the first four months of this year, according to the latest figure released by the Nigerian Stock Exchange (NSE).

    The four-month foreign portfolio investment (FPI) indicated foreign investors accounted for more than two-thirds of transaction value at the Nigerian stock market during the period, with foreign investments picking up gradually in the last month.

    The report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.

    According to the report, foreign investors were responsible for about 68 per cent of total transactions while Nigerian investors accounted for 32 per cent. Both sell and buy transactions from foreign investors amounted to N495.3 billion as against N236.7 billion traded by domestic investors, indicating aggregate turnover of N731.9 billion.

    Analysis of foreign portfolio transactions however indicated that there were more sale transactions than buy transactions. Foreign investors sold about N302.82 billion worth of shares as against N192.47 billion bought during the period.

    In April, foreign investors traded N138.79 billion worth of shares including sales transactions of N73.73 billion and buy transactions of N65.06 billion. Total domestic transactions stood at N45.64 billion. Total transactions during the month stood at N184.43 billion.

    The foreign sale-buy trend in April followed the same trend in recent months, although the momentum of buy transactions appeared to be picking up. In the first quarter, nearly two-thirds of foreign portfolio transactions were on the sell side.

    According to the NSE, total foreign outflows stood at N229.03 billion in the first quarter, representing some 64.2 per cent of total foreign transactions during the period. Total foreign inflows stood at N127.41 billion. Altogether, foreign investors’ deals accounted for N356.50 billion during the three-month period, more than 65.11 per cent of total transactions of N547.51 billion. This indicated that Nigerian investors accounted for N191.01 billion, 34.89 per cent of total transactions, during the period.

    Month-on-month analysis showed that there was increase in the momentum of foreign transactions in March 2014, with increases in both sell and buy orders. However, the downtrend continued to dominate transactions. Total foreign outflow in March 2014 stood at N75.42 billion as against inflow of N55.13 billion, totaling N130.55 billion. Foreign investors accounted for 78.25 per cent of total transactions-foreign and domestic, of N166.84 billion in March 2014.

    The flow of investments in March 2014 contrasted sharply with the situation in March 2013 when there were more inflows than outflows. Total foreign inflows totaled 53 per cent of total foreign transactions in March 2013. Total foreign transactions stood at N80.14 billion in March 2013, consisting of inflow of N43.13 billion and outflow of N37.01 billion.

    Month-on-month, the outflows in February are about 107 per cent higher compared to January 2014 and about 183 per cent compared to February 2013. While total transactions at the NSE increased from N181.97 billion in January 2014 to N198.70 billion in February 2014, foreign outflows accounted for the increased tempo of activities and the higher proportion of foreign participation to local participation.

    Foreign portfolio outflows stood at N103.53 billion in February 2014 as against foreign inflows of N32.75 billion. These indicated that foreign investors accounted for 68.59 per cent of total transactions during the period.  This contrasted sharply with the situation in similar earnings season of February 2013 when foreign investors had more inflows at N39.34 billion as against outflows of N36.63 billion.

    Total foreign outflow had stood at N50.14 billion in January 2014 as against inflow of N39.53 billion during the period, bringing total foreign transactions to N89.67 billion. In comparable period of January 2013, foreign inflow was higher at N40.96 billion against outflow of N20.50 billion.

    Recent reports have continued to highlight increased foreign participation, though negative. Foreign investors accounted for 49.28 per cent of total transaction value of N181.97 billion in January 2014 as against 36.89 per cent of total transactions of N166.60 billion in January 2013 and 48.91 per cent of total transactions of N142.24 billion in December 2013.

    Portfolio flow analysis in recent period had shown a consistent trading pattern in foreign transactions. While foreign investors flowed in more funds than they took out in the first half of 2013, they have since been taking more money out than they invested since the beginning of the second half of 2013.

    Month-on-month analysis showed that total foreign transactions closed December 2013 at N69.57 billion, consisting of inflow of N32.40 billion and outflow of N37.17 billion. Total foreign transactions rose to N88.89 billion in November, including inflow of N42.68 billion and outflow of N46.21 billion. These had closed October at N82.33 billion including inflow of N39.45 billion and outflow of N42.88 billion.

    In September, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seventh month report for July 2013 had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Foreign investors had accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June respectively.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio investors concluded deals worth about N2 trillion on publicly quoted Nigerian equities between 2012 and 2013. Value of foreign portfolio transactions on the NSE increased by 29 per cent in 2013 as domestic investors showed keener interests in listed equities.

    Value of foreign portfolio transactions increased from N808.4 billion in 2012 to N1.04 trillion in 2013. In both years, Nigeria retained net inflow from foreign investors. However, net inflow dropped considerably from N94.4 billion in 2012 to N20.48 billion in 2013, reflecting the speculative and edgy nature of foreign portfolios during the year.

    Foreign investors had accounted for about 61.4 per cent of total turnover on the NSE in 2012 while domestic investors accounted for 38.6 per cent. However, domestic investors stepped up their participation with 49.2 per cent in 2013 while foreign investors slowed down to 50.8 per cent. Foreign portfolios were the main drivers of transactions on the NSE between 2011 and 2012, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    Total foreign inflow increased from N451.40 billion in 2012 to N531.26 billion in 2013 just as foreign outflow correspondingly increased from N357 billion in 2012 to N510.78 billion in 2013.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.

  • Foreign investors stake N495b on Nigerian equities

    Foreign investors stake N495b on Nigerian equities

    Foreign investors staked more than N495 billion on Nigerian equities in the first four months of this year, according to the latest figure released by the Nigerian Stock Exchange (NSE).

    The four-month foreign portfolio investment (FPI) indicated foreign investors accounted for more than two-thirds of transaction value at the Nigerian stock market during the period, with foreign investments picking up gradually in the last month.

    The report used two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market as a barometer for the economy. Foreign portfolio investment outflow includes sales transactions or liquidation of equity portfolio investments through the stock market while inflow includes purchase transactions on the NSE.

    The NSE report is generally regarded as a credible gauge of foreign portfolio investments in Nigeria as it coordinates data from nearly all active investment bankers and stockbrokers.

    According to the report, foreign investors were responsible for about 68 per cent of total transactions while Nigerian investors accounted for 32 per cent. Both sell and buy transactions from foreign investors amounted to N495.3 billion as against N236.7 billion traded by domestic investors, indicating aggregate turnover of N731.9 billion.

    Analysis of foreign portfolio transactions however indicated that there were more sale transactions than buy transactions. Foreign investors sold about N302.82 billion worth of shares as against N192.47 billion bought during the period.

    In April, foreign investors traded N138.79 billion worth of shares including sales transactions of N73.73 billion and buy transactions of N65.06 billion. Total domestic transactions stood at N45.64 billion. Total transactions during the month stood at N184.43 billion.

    The foreign sale-buy trend in April followed the same trend in recent months, although the momentum of buy transactions appeared to be picking up. In the first quarter, nearly two-thirds of foreign portfolio transactions were on the sell side.

    According to the NSE, total foreign outflows stood at N229.03 billion in the first quarter, representing some 64.2 per cent of total foreign transactions during the period. Total foreign inflows stood at N127.41 billion. Altogether, foreign investors’ deals accounted for N356.50 billion during the three-month period, more than 65.11 per cent of total transactions of N547.51 billion. This indicated that Nigerian investors accounted for N191.01 billion, 34.89 per cent of total transactions, during the period.

    Month-on-month analysis showed that there was increase in the momentum of foreign transactions in March 2014, with increases in both sell and buy orders. However, the downtrend continued to dominate transactions. Total foreign outflow in March 2014 stood at N75.42 billion as against inflow of N55.13 billion, totaling N130.55 billion. Foreign investors accounted for 78.25 per cent of total transactions-foreign and domestic, of N166.84 billion in March 2014.

    The flow of investments in March 2014 contrasted sharply with the situation in March 2013 when there were more inflows than outflows. Total foreign inflows totaled 53 per cent of total foreign transactions in March 2013. Total foreign transactions stood at N80.14 billion in March 2013, consisting of inflow of N43.13 billion and outflow of N37.01 billion.

    Month-on-month, the outflows in February are about 107 per cent higher compared to January 2014 and about 183 per cent compared to February 2013. While total transactions at the NSE increased from N181.97 billion in January 2014 to N198.70 billion in February 2014, foreign outflows accounted for the increased tempo of activities and the higher proportion of foreign participation to local participation.

    Foreign portfolio outflows stood at N103.53 billion in February 2014 as against foreign inflows of N32.75 billion. These indicated that foreign investors accounted for 68.59 per cent of total transactions during the period.  This contrasted sharply with the situation in similar earnings season of February 2013 when foreign investors had more inflows at N39.34 billion as against outflows of N36.63 billion.

    Total foreign outflow had stood at N50.14 billion in January 2014 as against inflow of N39.53 billion during the period, bringing total foreign transactions to N89.67 billion. In comparable period of January 2013, foreign inflow was higher at N40.96 billion against outflow of N20.50 billion.

    Recent reports have continued to highlight increased foreign participation, though negative. Foreign investors accounted for 49.28 per cent of total transaction value of N181.97 billion in January 2014 as against 36.89 per cent of total transactions of N166.60 billion in January 2013 and 48.91 per cent of total transactions of N142.24 billion in December 2013.

    Portfolio flow analysis in recent period had shown a consistent trading pattern in foreign transactions. While foreign investors flowed in more funds than they took out in the first half of 2013, they have since been taking more money out than they invested since the beginning of the second half of 2013.

    Month-on-month analysis showed that total foreign transactions closed December 2013 at N69.57 billion, consisting of inflow of N32.40 billion and outflow of N37.17 billion. Total foreign transactions rose to N88.89 billion in November, including inflow of N42.68 billion and outflow of N46.21 billion. These had closed October at N82.33 billion including inflow of N39.45 billion and outflow of N42.88 billion.

    In September, total foreign inflow was N26.14 billion as against outflow of N27.88 billion, bringing total foreign transactions to N54.02 billion. Total transactions at the stock market during the month stood at N108.19 billion, out of which domestic investors contributed N54.17 billion or 50.07 per cent.

    In August, foreign inflow had stood at N31.12 billion as against outflow of N39.76 billion. Total foreign transactions thus stood at N70.88 billion, 52.26 per cent of the total turnover of N135.63 billion recorded for the month.

    Foreign investors had took out nearly a double of every penny they invested in the Nigerian stock market in July, unusually high disparity between foreign portfolio inflow and outflow, which led to significant decline in net foreign investment in the Nigerian stock market.

    The seventh month report for July 2013 had indicated that total foreign inflow stood at N31.81 billion as against outflow of N61.90 billion in July, showing the widest divergence between inflow and outflow so far this year.

    Total foreign inflow had risen to N90.15 billion while outflow stood at N60.09 billion as total foreign transactions increased to N150.24 billion in June.

    Foreign investors had accounted for 36.89 per cent, 39.65 per cent, 52.78 per cent, 64.48 per cent, 48.68 per cent and 51.13 per cent in January, February, March, April, May and June respectively.

    Portfolio transactions by foreign investors totaled N61.46 billion, N75.97 billion, N80.14 billion, N122.97 billion, N91.86 billion and N150.24 billion in January, February, March, April, May and June respectively.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio investors concluded deals worth about N2 trillion on publicly quoted Nigerian equities between 2012 and 2013. Value of foreign portfolio transactions on the NSE increased by 29 per cent in 2013 as domestic investors showed keener interests in listed equities.

    Value of foreign portfolio transactions increased from N808.4 billion in 2012 to N1.04 trillion in 2013. In both years, Nigeria retained net inflow from foreign investors. However, net inflow dropped considerably from N94.4 billion in 2012 to N20.48 billion in 2013, reflecting the speculative and edgy nature of foreign portfolios during the year.

    Foreign investors had accounted for about 61.4 per cent of total turnover on the NSE in 2012 while domestic investors accounted for 38.6 per cent. However, domestic investors stepped up their participation with 49.2 per cent in 2013 while foreign investors slowed down to 50.8 per cent. Foreign portfolios were the main drivers of transactions on the NSE between 2011 and 2012, with foreign investors accounting for average of two-thirds of equity transactions between 2011 and 2012.

    Total foreign inflow increased from N451.40 billion in 2012 to N531.26 billion in 2013 just as foreign outflow correspondingly increased from N357 billion in 2012 to N510.78 billion in 2013.

    Foreign investors staked about N4.08 trillion on quoted shares on the NSE between 2007 and 2012. Foreign investors had gradually and consecutively increased their investments in Nigerian equities from about 15 per cent of total market turnover in 2007 all through till a high of about 67 per cent in 2011.

    Foreign portfolio transactions increased from N615.6 billion in 2007 to N787.4 billion in 2008. These trimmed down to N424.6 billion in 2009 before rising consecutively to N577.3 billion and N847.9 billion in 2010 and 2011 respectively. Foreign portfolio trades stood at N808.4 billion in 2012. With these, the two-way flow of foreign portfolio investments showed that while foreign investors flowed in about N2.01 trillion during the period, they equally took away about N2.17 trillion.