In the first quarter of 2024, foreign portfolio inflows into Nigeria’s Stock Market (NGX) were N93.37 billion, a 415% rise over the same period in 2023.
The Foreign Portfolio Investment statistics for the first quarter, released by the NGX research department, highlight this noteworthy increase.
In terms of money, nevertheless, the actual inflow for the quarter was $70.1 million, as opposed to $39.2 million for the same time in 2023.
In sharp contrast to the N461.13/$1 rate used in the first quarter of 2023, the NGX utilised an exchange rate of N1330/$1 in the first quarter of 2024.
The first quarter of 2024 saw contributions from foreign portfolio investors of $70.1 million, while there was also a $90.03 million outflow.
Due to this, there was a net FX outflow of $19.87 million as opposed to $37.8 million at the same time last year.
March had the largest monthly foreign portfolio transactions, coming in at around $70 million. Transactions in February and January came in at $49.4 million and $39.9 million, respectively, for a total of $160.2 million (N213.8 billion).
The overall FPI transactions for Q1 2023, which exceeded $116.4 million, fell well short of the $309 million recorded in 2022, even though Q1 2024 was a great quarter. Prior to the COVID-19 epidemic and the start of the most recent economic downturn in 2019, the total amount of FPI transactions hit $724.
A more thorough examination of the transactions that were carried out between February and March 2022 showed that, while total foreign transactions fell from N45.43 billion (roughly $109.30 million) to N42.17 billion (roughly $101.36 million), total domestic transactions increased by 3.59% from N138.13 billion to N143.09 billion. Institutional investors, on the other hand, outperformed retail investors by 16%, with retail transactions falling from N61.39 billion to N60.61 billion.
Domestic transactions fell 58.80% over 15 years, from N3.556 trillion in 2007 to N1.465 trillion in 2021.
Foreign transactions, on the other hand, fell by 29.38% from N616 billion to N435 billion within the same period.
Domestic transactions accounted for over 77% of the total in 2021, with foreign transactions accounting for approximately 23%. Domestic transactions in 2022 were estimated to be worth N563.29 billion, while overseas transactions were worth N129.01 billion.
Despite these problems, foreign investor involvement in Nigeria’s shares market has averaged less than 15% since 2022, owing to a variety of variables including as Nigeria’s currency rate situation, rising interest rates in the United States, and a shift in global capital flows away from emerging nations.
In the first quarter of 2024, the NGX was still among the top-performing stock exchanges, despite the widespread indifference of foreign portfolio investors.
NGX data shows that the NGX All Share Index (ASI) has returned 38.9% so far this year, which is a huge increase above the 5.82% return that was noted during the same period in 2023.
The ASI showed steady year-to-date returns from 2021 to 2023: 50.03%, 6.07%, 19.98%, and 45.9%, in that order. The majority of the gains went to domestic investors, who still account for the majority of transaction flows.
