The total amount of Foreign Portfolio Investments in the Nigerian Stock Exchange for the first two months of the year stood at N140.8bn.
The amount of inflow and outflow of FPI in the market between January and February 2013 represents 17.4 per cent of the N808.4bn recorded at the end of 2012.
According to the NSE, the N808.8bn FPI recorded last year was made up of a total inflow of N454.1bn and outflow of N357.31bn.
FPIs represent the passive holdings of securities and other financial assets, which may not entail active management or control of the securities’ issuer. They are usually positively influenced by high rates of returns and reduction of risk through geographic diversification.
The return on FPI is normally in the form of interest payments or non-voting dividends.
In 2011, FPI accounted for 66.8 per cent of the N1.27tn worth of transactions recorded in the capital market, while domestic investments were just 33.2 per cent.
Acknowledging this, the Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, said the various actions and reforms undertaken by the regulators to grow the market in the last few years had impacted positively on activities.
She said the Exchange had become more transparent in its dealings and activities, which had brought about increase in investor confidence to the market.
The Chief Executive Officer, NSE, Mr. Oscar Onyema, said the opportunities for further growth in the market remained endless, adding that the Exchange was putting measures in place to ensure that the market took advantage of such opportunities.
This, he stated, led to the plans by the NSE to roll out more Exchange Traded Funds into the market this year,
He said, “ETFs remain one of the fastest growing funds in major markets, and so, we plan to take advantage of this to roll out additional ETFs this year. Also, we plan to roll out derivatives in 2014 and 2015 to further deepen the Nigerian capital market.
“The opportunities in the market and the Nigerian economy are huge, and we at the Exchange are aligning ourselves with what government is doing in the area of privatisation and unbundling in the power sector, we also hope that this will translate into more companies coming to list on the NSE, thus deepening our market.”
Analysts from Meristem Nigeria Limited noted that apart from the attractiveness of the returns from the equities market, the yields from the bond market was an upside for the equities market.
They added that the absence of declining yield expectation in the last few weeks had made investible funds to find their way into other high return investible financial assets such as the equities market.