Capital market regulators, the Securities and Exchange Commission and the Central Bank of Nigeria, have concluded all arrangements to tackle the consistent declining financial indicators at the nation’s stock market and find ways around sustainability.
According to them, this was part of the efforts to strengthen domestic institutional players to enable them withstand the shock that normally follows dumping of company shares as foreign investors exit Nigeria.
One of the top issues on the agenda was how to resuscitate the market maker project by retooling the previous guideline in line with current realities, as one of the major requirements at the time was that market makers must have the support of a strong financial power house, tagged “liquidity provider,” among others to be licensed for the role.
Data on domestic and foreign portfolio investments on the NSE shows that total transactions rose from N935.26billion in first half 2017 to N1.597trillion in first half 2018.
There were, however, more outflows than inflows, with net FPI deficit, which stood at N38.41billion, as against the N1.71billion net position in first half of 2017.
Foreign inflows and outflows stood at N380.65billion and N419.06billion, respectively in the first half of 2018 compared with inflows and outflows of N215.97billion and N214.26billion in first half of 2017.
The report also showed that foreign portfolio investors have consistently remained the dominant group in the Nigerian equities market. It accounted for about N799.7billion of transactions in the first half of 2018, representing an increase of 85.9 per cent over the N430.23billion recorded in the comparable period of 2017.
This was, however, slightly higher than the N797.47billion worth of equities traded by domestic investors, which were 57.9 per cent, increase on N505.03billion traded in the review period.
The benchmark All-Share index of the Nigerian Stock Exchange, for example, has gone from being the best on Returns on Investment in January across the globe, to becoming one of the worst.
In the month of January, the NSE ASI closed at 44,343.65 basis points, after touching a high of 45,321.82bps from an opening figure of 38,243.19bps, while market capitalisation gained N2.29trillion, closing at N15.9trillion, from an opening value of N13.61trillion, representing a 16.83 per cent appreciation in value.