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According to the latest data from the Nigerian Stock Exchange, a total of N435.41bn was withdrawn from the market from January to July this year, compared to an outflow of N236.32bn in the same period in 2017.

The total value of equities listed on the NSE has taken a beating, closing at N11.88tn on Friday, as against a peak of N16.154tn on January 19.

The market capitalisation rose from N13.617tn 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.

Read more:
2019 polls: Foreign investors withdraw N435.41bn from stock market http://www.sanwomi.com/2018/09/2019-polls-foreign-investors-withdraw.html