Foreign investors are cutting down on their investment into the Nigerian stock market, and this is affecting companies’ liquidity sources, investigation has revealed.
According to findings, foreign portfolio investors have cut down investment in the Nigerian stock market by 37.24 per cent, as they transacted N273.16 billion stocks between January and July 2022, against the N435 billion traded during the corresponding period of 2021.
Also, in the July 2022 data obtained from the Nigerian Exchange Limited (NGX), foreign investors are also taking out their investment faster than they are investing into the Nigerian equity market, with inflows and outflows closing the month at N13.68 billion and N16 billion respectively.
During the seven months period under review, while foreign investors had reduced their trade value, domestic investors have increased theirs by 1.70 per cent, transacting N1.490 trillion year-to-July, slightly above the N1.465 trillion recording a year before – while inflows have remained high against outflows in July 2022, with both recording N36.97 billion and N34.53 billion respectively.
Aside from revenue generated from products and services sold by Nigerian companies, other earning sources includes trades on their shares in the Nigerian stock market, and as inflation weighs heavily on the former regardless of the turnover growth, rising from 18.6 per cent in June to 19.64 per cent in July, Nigerian firms are also losing grip on the latter.
