₦airaland Forum

Welcome, Guest: Join Nairaland / LOGIN! / Trending / Recent / New
Stats: 2,316,492 members, 5,104,897 topics. Date: Tuesday, 20 August 2019 at 01:55 AM

2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market - Investment - Nairaland

Nairaland Forum / Nairaland / General / Investment / 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market (8864 Views)

Election Result: Nigerian Stock Market Loses N85 Billion In 6 Hours / 2019 Polls: Foreign Investors Withdraw N435.41bn From Stock Market / Nigeria Seeks Foreign Investors For Smart Cities Project (2) (3) (4)

(1) (2) (Reply) (Go Down)

2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by ijustdey: 7:40am On Sep 24, 2018
The nation ’ s stock market has shrunk in recent months following the exit of foreign investors as the 2019 general elections approach, FEYISAYO POPOOLA writes
Foreign portfolio investors have pulled out billions of naira out of the Nigerian stock market in recent months amid bearish sentiments , primarily due to the approaching elections.

According to the latest data from the Nigerian Stock Exchange, a total of N435.41bn was withdrawn from the market from January to July this year , compared to an outflow of N 236 . 32bn in the same period in 2017.

The total value of equities listed on the NSE has taken a beating, closing at N 11.88tn on Friday, as against a peak of N 16.154 tn on January 19.

The market capitalisation rose from N 13 . 617 tn at the start of the year as a result of greater impetus from the recovery in global oil prices, increased domestic reserves , greater foreign exchange market stability and declining inflation .

“ Once there is any cause to fear, portfolio investors sell out their shares and they come back when the environment is better ; all of these create a lot of volatility in the market and may be one of the reasons why we do not have a lot of initial public offerings in the country, ” the Associate Director, Capital Markets , PwC Nigeria , Alice Tomdio , told our correspondent .
She said more focus ought to be placed on encouraging the participation of domestic investors in the capital market .

According to her , the current ratio of foreign investors to domestic investors is still quite healthy as foreign portfolio investors participate primarily in the secondary markets .

She stated that it was normal for earnings release or government action to cause a big swing in the activity of foreign investors.

With a significant decrease of 64.68 per cent in total foreign transactions from N 102.41bn in June to N 36.17bn in July , domestic investors outperformed foreign investors by 50.48 per cent in July .

The domestic transactions , according to the NSE , were largely driven by the 55. 48 per cent increase in the retail domestic participation , which recorded N 29.12bn in June and N 65.42bn in July .

Between 2011 and 2015 , foreign transactions consistently outperformed domestic transactions ; however, domestic transactions marginally outperformed foreign transactions in 2016 and 2017 , accounting for 52 per cent of the total transaction value last year .

Also , foreign transactions , which stood at N 1.539 tn in 2014 , declined to N 1.025 tn in 2015 and N 518 bn in 2016, but increased significantly by 133 per cent to N 1.208 tn in 2017. This accounted for about 48 per cent of total transactions last year .

Over an 11 year period , domestic transactions decreased by 62. 46 per cent from N 3.556 tn in 2007 to N 1.335 tn in 2017, meaning more foreign investors were dominating the market .

However , there was a significant increase in domestic transactions in 2017 by 111 per cent from N 634 bn recorded in 2016 as portfolio investors withdrew .

The President, Independent Shareholders Association of Nigeria , Sir Sunny Nwosu , said the economic policies of the country were responsible for the exit of foreign investors .

He noted that if the policies were favourable, investors would come around and if otherwise , they would flee.

Nwosu stated, “ It is not even advisable for them to stay at this point because there is no assurance we can give them as elections are approaching ; they need to be very careful about their money . These investors have been in this country since and have enjoyed a lot; they are not willing to gamble with their money now .

“ When the situation in Nigeria is showing a doom time because of the elections, they will all go away and wait until after the elections. They want to make sure that the economic situation does not affect their investments, whereby they will lose money."

The Partner, Corporate Finance Practice , PwC Nigeria, Andrei Ugarov , stated that more emphasis ought to be placed on Foreign Direct Investment instead of Foreign Portfolio Investment, describing the former as more beneficial to the country.

He said , “When things are not so good and are shaky , portfolio investors leave immediately; it is very easy for them to sell off their shares and move out; whereas , if you have invested in a private company or industry , it is more difficult for you to leave because you have a longer -term view .

“ So , from the development and sustainability perspective , the focus should really be on direct investment . Although it is also good to have portfolio investors , that should not be the end objective . ”

According to him , currency control is also a major issue for portfolio investors because when uncertainty about getting their cash out exists , there will be uncertainty about putting cash in.

Ugarov stated that currency control and uncertainties could be the reason why there was a scarcity of portfolio investors as well as a lack of adequate foreign exchange .

The Managing Director, Cowry Asset Management Limited , Johnson Chuwku , said the only thing the government could do to reduce the exit of foreign portfolio investors was to reduce political tension in the country.

According to him , the government needs to give assurance that the coming elections will be free and fair , and that the two major political parties will not create war .

He noted that if the confidence of the public was not restored , there would be a problem.

Chukwu said , “The major thing driving portfolio investors is not necessarily that the economy is weak ; the economy is still quite strong.

“ The underlying thing is that quoted companies are performing very well . But because portfolio investors are always weary about tensions in third world countries , they are not willing to risk being caught in a crossfire of political parties . ”

According to him , the only thing that can restore the confidence of the investors or give them the assurance to stay is if the tension is being moderated by ensuring that the outcome of the elections will be acceptable by the citizens.

He said another thing that could moderate the exit of portfolio investors was the increase in yield of Federal Government ’ s short - term instruments.

“ If the yield spikes, it can attract those that have very high appetite for risk to come back into the country, ” Chukwu added.

He stated that increase in yields could only be used to complement a moderated political environment , adding that a reduction in political tension remained key as increased yields could not sustain investors ’ confidence on its own.


https://punchng.com/2019-polls-foreign-investors-withdraw-n435-41bn-from-stock-market/

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by CROWNWEALTH019(m): 10:34am On Sep 24, 2018
cheesy Job loss loading .... wink

22 Likes 2 Shares

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by otunde527: 10:34am On Sep 24, 2018
Lol


What a disaster..
The election is scaring investors away

What a bad leadership system we have

More withdrawal from investors to follow in the coming days.

God what are we into

Get your rmb with us at #48/rmb

14 Likes 2 Shares

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by fineboynl: 10:34am On Sep 24, 2018
...finally from a joints scientists worldwide we have developed this for 2019 election.

please mentioned those still remaining to take this.

24 Likes 1 Share

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Victornezzar: 10:35am On Sep 24, 2018
They have seen that next year would be very dramatic

If you Can leave this country now...Just do it

22 Likes 1 Share

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by IAMTHEHERO: 10:35am On Sep 24, 2018
If l am a foreign investor l would have pulled out even before now. Since some Nigerians especially the zombies and BMC have refused to learn.
If Buhari and his APC gangs come back after 2019 election, their mission will be to bury the ECONOMY.

3 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Etizz: 10:35am On Sep 24, 2018
And the head of state will claim nobody inform him about it.......


Damn ignorant guy.....

9 Likes 1 Share

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Kclique: 10:35am On Sep 24, 2018
Buhari is an evil omen on our nation.
The speed with which we wish to get back our economy should be the speed with which we should vote Buhari out of Aso Rock.

25 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by gen2briz(m): 10:35am On Sep 24, 2018
Almost 450billion....Huummmm

5 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by philtex(m): 10:36am On Sep 24, 2018
Changeeee. According to Abokies grin grin grin








HIT LIKE IF YOU WANT BUHARI OUT COME 2019 sad

26 Likes 1 Share

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Olohunjedalo(m): 10:36am On Sep 24, 2018
CROWNWEALTH019:
cheesy Job loss loading .... wink
Wetin concern stock market with job
Olodo . angry

3 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by coolzeal(m): 10:36am On Sep 24, 2018
It's quite pathetic the kind of dirty and primitive games exhibited as the next general elections is at our door steps. The fear of uncertainty creates panic in the market system. This country disgust me.

7 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Proffdada: 10:36am On Sep 24, 2018
They must be scared of PDP grin

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by 10kbelow: 10:37am On Sep 24, 2018
If na you nkor you no go withdraw your money

Abi you won hear say your mavro don freeze undecided

4 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Tracypacy(f): 10:37am On Sep 24, 2018
k
Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Juliusmalema: 10:37am On Sep 24, 2018
Lolzzzzzzzz

1 Like

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Chynexa(m): 10:37am On Sep 24, 2018
Another recession loading........

This time, it's gonna bbe worse off!!!!!

3 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by CROWNWEALTH019(m): 10:37am On Sep 24, 2018
Olohunjedalo:

Wetin concern stock market with job
Olodo . angry
Go buy Essential economics and comprehensive economics to understand the meaning of CAPITAL FLIGHT well, you talking to an economist by training and profession


OLODO

24 Likes 2 Shares

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by chloride6: 10:38am On Sep 24, 2018
Dont yet buy.....wait small

grin grin
Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by maberry(m): 10:38am On Sep 24, 2018
Proffdada:
They must be scared of PDP grin
grin
Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by MyVILLAGEpeople(m): 10:38am On Sep 24, 2018
Buhari why why
I blame Buhari.

1 Like

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by maberry(m): 10:39am On Sep 24, 2018
Proffdada:
They must be scared of PDP grin
Zombie
Talk true or keep shut

10 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Quality20(m): 10:40am On Sep 24, 2018
PDP is gonna win in 2019. we are ready to show northerners that our blood is really hot. In fact we in PDP are on a holy crusade. we can't allow APC and Tinubu control us in d Christian south.
They must allow PDP, a majority xtian party backed by CAN, Jews, ipob and all d pastors to take d nation yo d promised land

2 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by shitholenation: 10:40am On Sep 24, 2018
Buhari's political ambition will cause more harm to this Nation.

2 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by drchuks1234(m): 10:41am On Sep 24, 2018
See what pmb have got us into now, nigeria is now a laughing stock in stock market, chai it is finish

1 Like

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by BruncleZuma: 10:41am On Sep 24, 2018
grin grin grin grin
Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by jaxxy(m): 10:45am On Sep 24, 2018
Hmmm
Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by bettercreature(m): 10:47am On Sep 24, 2018
And crude oil just jumped to $81 first time in 4years.Buhari is so unfortunate

1 Like

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by madridsta007(m): 10:47am On Sep 24, 2018
otunde527:
Lol


What a disaster..
The election is scaring investors away

What a bad leadership system we have

More withdrawal from investors to follow in the coming days.

God what are we into

Get your rmb with us at #48/rmb

It is an indication that they expect Buhari to rig-win.
Once he wins in 2019, if he does, watch the stock market. They will pull their funds out.
Investors are not driven by feelings or religious or ethnic sentiments. If they do not see that the man in the helm knows what he is doing, they are off to Ghana, perhaps, who are recording 8.3% GDP growth.

2 Likes

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by Nobody: 10:47am On Sep 24, 2018
They already know what APC have in stock for Nigerians with the way they handled Osun election.

1 Like

Re: 2019 Election: Foreign Investors Withdraw N435.41bn From Stock Market by bigfish3k: 10:48am On Sep 24, 2018
let them continue manipulating elections as inconclusive
and the larger nigerian populace will be loosin economically

later APC will be blaming GEJ

1 Like

(1) (2) (Reply)

VIDEO PROOF: How You Too Can Make Over 200 USD With BITCOIN Daily. / My Questra Journey So Far / Stock Market Lost N1.732tn In One Year Under Buhari

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (0) (1) (2) (3) (4) (5) (6) (7) (8) (9)

Nairaland - Copyright © 2005 - 2019 Oluwaseun Osewa. All rights reserved. See How To Advertise. 160
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.