Foreigners have reduced their investments in the Nigerian Stock Exchange due to concern about insecurity and fears regarding the outcome of 2015 elections.

The latest investment details from the NSE showed that foreign investments dropped significantly by N73.40bn at the end of October.

As of September this year, the total investments by foreign investors stood at N226.68bn.

The document obtained from the NSE on Friday indicated the amount dropped to N153.28bn by October ending. This showed a difference of N73.40bn or 32 per cent.

Some capital market experts who spoke to our correspondent said the consistent reduction in foreign investments was partly due to increasing security concerns as well as tight monetary policies of the Central Bank of Nigeria.

They also said the various activities of the extremist Islamic sect, Boko Haram, as well as the upcoming general elections must have contributed substantially to the reduced investments by the foreigners.

The statistics also showed that domestic investments in the period under review fell significantly.

The local investment, which stood at N296.06bn as of September 2014, dropped by N274.24bn or 92.6 per cent to N21.82bn.

The general reduction of both foreign and local investments, according to experts, has led to a major depression in the capital market as the NSE’s All-Share Index, which measures the performance of the equities on the Exchange, has recorded significant decline.

The Managing Director and Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, who said the factors leading to the drop were both external and internal, explained that the trend was likely to continue until the second quarter of 2015.

He said, “The factors driving the bear run seem to be worsening. They are declining oil prices, depleting reserves, termination of quantitative easing, likely further tightening of monetary liquidity by the central bank and a possible two-horse unpredictable presidential election in February 2015.

“These factors are most unlikely to reverse in the last quarter of this year. It is, therefore, most probable that the equities market will not recover from its current loss position this year. The earliest time one should expect a rebound is the second quarter of 2015; and this is subject to the outcome of the general elections.”

The Managing Director, Highcap Securities Limited, Mr. David Adonri, said the reduced investments by the foreign investors, who had before now been driving investment in the NSE, was largely as a result of insecurity and the political risk attached to any business initiated in the face of the 2015 elections.

He said, “The decline in foreign investment from July to date has led to a general depression of the equities market. Now, the All-Share Index is negative.

“Some of the factors behind the decline are the heightening insecurity in Nigeria, tight monetary policy of the CBN, tapering of quantitative easing by the United States Feds. Also, the decline in the price of crude oil has contributed to the reduced investments of the foreign investors in our market.”

An analysis of the NSE statistics showed the Foreign Portfolio Investment transactions at the nation’s bourse which had the highest flows for the year in September decreased to N153.28bn (about $0.99bn) in October 2014, down by 32.38 per cent from September 2014’s.

In comparison with the FPI, the domestic transactions also decreased significantly, from 56.64 per cent to 12.46 per cent.

http://www.punchng.com/business/foreign-investments-drop-by-32-in-one-month/

Everyone has zero confidence in Mr. JonaTAN that there would be adequate security. Dem PDP will soon come and blame APC.

Dis all buhari fault nonsense

When Jonathan and his clueless and inept government keeps giving empty assurances to the investors without keeping to their promise,what do you expect? The investors look for a safer environment to do their business.

Jonathan declining Nigeria since 2010

- declining foreign reserves

- declining security

- declining unity

- declining stock market

- declining global prestige

- declining territory size!

- declining declining

Despite all this I say GEJ till a mosquito born this day dies!

I advise you read OBJ's book. The watch
''After 6 months of Jonathan in office, an Aid I have in his administration came to me in private and said, we have done a great ''de-service'' to this country. The president jonathan is a damage and a mistake to Nigeria.'' That's what promted the serial secret letters that were later made open, criticism and book writing.

6 years of rule, Jonathan constructed railway on the paper which made Alh Ameachi unable to transport on the rail. 6 years of rule, economy of Nigeria became number one on the paper, which made average Nigerian to still be living under $1 per day. 6 years of rule, Jonathan created work thru promises of the mouth which made about 16 people died tragically looking for immigration job around March. 6 years of rule, a leader who swore an oath to protect his country but never did and using opposition as an excuse everytime. 6 years of rule, a leader became sixth African richest president, 6 years of rule, a leader who created more universities but ASUU were on strike for six good months! 6 years of rule, a government who promised to sanitise the whole system from corruption, but some are saying GEJ fought corruption in Agriculture and left PENSION scam, Fuel subsidy scam, Stella Oduah's Scam, Diezani's scam, Lawal Farouk scam, Oritsejafor scam, Abacha son's scam, Fayose's scam, Buruji Kashamu's Scam, Fani Kayode's scam, $20billion scam...by God's's grace this man can NEVER win again.

To all the janjaweeeds above, did school pass through you lot at all? It is called 'election period', people hold back on investments. Moreover, the price of oil has gone down by 40%; what we are witnessing is its knock-on effect on other sectors.

I don't expect you political jobbers to understand this though. Politicians should stick to their day jobs of deceiving the masses, okay.

Jonathan has destroyed Nigeria.We with GMB must do something by voting APC in 2015.

The only solution now is to see a declining Jonathan.He's a selfish devil with his village wife.

Bayswater:
To all the janjaweeeds above, did school pass through you lot at all? It is called 'election period', people hold back on investments. Moreover, the price of oil has gone down by 40%; what we are witnessing is its knock-on effect on other sectors.

I don't expect you political jobbers to understand this though. Politicians should stick to their day jobs of deceiving the masses, okay.

32% in one month is a serious problem, it is not the dip itself but the suddenness of it. It looks like it is more than elections season hedging. Nigerians are dumping shares as well. I think the overall perception is bad of the oil price effect and the government.

Up gej...the kano dancer!

braine:
Everyone has zero confidence in Mr. JonaTAN that there would be adequate security. Dem PDP will soon come and blame APC.

Quit displaying your second to non grade A ignorance.
It is normal for foreign investors to stop pumping in money into a developing nation economy during election period as businesses would run low due to the politically charged atmosphere.As soon as the elections are over everything will come back to status quo.
But I guess in your immense hate for Jonathan you just exposed your indisputable daftness, what a shame.

Bayswater:
To all the janjaweeeds above, did school pass through you lot at all? It is called 'election period', people hold back on investments. Moreover, the price of oil has gone down by 40%; what we are witnessing is its knock-on effect on other sectors.

I don't expect you political jobbers to understand this though. Politicians should stick to their day jobs of deceiving the masses, okay.

are u saying gej will be pleased to stand b4 nigerians and tell us this? The man who never waited a second to use the 'rebasing' of economy that took us to number one in africa without any meaninful development or reduction in poverty to justify this feat and listed that as his achievement, wont hold back if this news is the other way round. He'd be quick to tel us how foreign investment jumped to 33% in one month , than telling us it dropped by 33% due to election time. Who believes that 'crumbs'?

Caseless:
are u saying gej will be pleased to stand b4 nigerians and tell us this? The man who never waited a second to use the 'rebasing' of economy that took us to number one in africa without any meaninful development or reduction in poverty to justify this feat and listed that as his achievement, wont hold back if this news is the other way round. He'd be quick to tel us how foreign investment jumped to 33% in one month , than telling us it dropped by 33% due to election time. Who believes that 'crumbs'?

The person you quoted already knew that it will take a lot of whipping to straighten your cankerworm head.

Truckpusher:
Quit displaying your second to non grade A ignorance.
It is normal for foreign investors to stop pumping in money into a developing nation economy during election period as businesses would run low due to the politically charged atmosphere.As soon as the elections are over everything will come back to status quo.
But I guess in your immense hate for Jonathan you just exposed your indisputable daftness, what a shame.

Going by the reasons given by the article by the OP, I'm not incorrect; insecurity is still a challenge, whether its election time or not.

Well, you can say and call me whatever you like. My assertion on lack of adequate security by your paymasters still stands.

braine:



Going by the reasons given by the article by the OP, I'm not incorrect; insecurity is still a challenge, whether is election time or not.

Well, you can say and call me whatever you like. My assertion on lack of adequate security still stands.

Well ,sorry for the name calling.
The insecurity is on a particular section of the country which doesn't play as a major host to these investors.
Why do you think that the economy is still stable despite the too many bombing in the North?
Wait until the SS and Lagos goes up in flames then you'll understand the true meaning of foreign investors leaving with their money.