Foreign Investment Surges: Stock Market Inflows Jump 168% To N118.92 Billion

Nigeria’s Foreign Portfolio Investment (FPI) in the stock market experienced a remarkable surge, soaring by 167.8 percent Year-on-Year (YoY) to N118.92 billion in February 2024 from N44.52 billion recorded in the same period in 2023. This significant rise was fueled by an enhanced liquidity environment in the foreign exchange (FX) market, attributed to reforms undertaken by the Central Bank of Nigeria (CBN).

According to the Nigerian Exchange Limited (NGX) Domestic and Foreign Portfolio Investment report for February 2024, FPI accounted for 11.78 percent, marking a 0.3 percentage point increase in its share of the total equities transaction, which amounted to N1.009 trillion during the period.

In a Month-on-Month (MoM) comparison, foreign investors’ stake surged by 23.9 percent to N65.81 billion from N53.11 billion in January 2024. Moreover, the contribution of foreign portfolio investors to the overall equities transaction escalated to 18.39 percent from 8.15 percent between January and February 2024.

The Year-to-Date (YtD) FPI inflow stood at N40.71 billion, constituting 37.9 percent of the total foreign investors’ commitment, while outflow reached N78.21 billion, representing 62.1 percent of the foreign portfolio investment.

Oluwaseun Dosumu, Head of Research at Parthian Securities, commented on the situation, stating, “The resurgence of foreign investors in the Nigerian market hinges on the policies and dynamics of the foreign exchange market in 2024. In the preceding year, 2023, we witnessed a weakened state of exchange rate fundamentals within the Nigerian forex market, primarily due to a decline in foreign exchange supply. With the anticipation of an enhancement in supply during the year, there is potential for a modest upturn in foreign portfolio investment on the Nigerian Exchange.

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