28 December 2012

Nigeria: Stock Market Attracts U.S.$9.18 Billion Foreign Investments in 10 Months

Despite the investor apathy suffered by the Nigerian Stock Market in the wake of the near crash of the market, the equities market has remained the most attractive investment to foreign investors, accounting for a whopping 78 per cent of total capital investment in different sectors of the economy as at October 2012.

Data obtained from the Central Bank of Nigeria (CBN) Statistics Database posted on its website indicates that total value of capital imported into Nigeria stood at $12.64 billion as at October 2012, out of which investments in equities accounted for $10.34 billion.

The investment comprised $1.32 billion in Foreign Direct Investment in equities, while $9.18 billion was invested in equities portfolios.

The attraction of the stock market to foreign investors, stems from the fact that the market made the highest return on investment at over 32 per cent in the current year.

Commenting on the development, Director General of the Securities and Exchange Commission (SEC) Ms Arunma Oteh said that foreign investors have worn 'glasses' (have more foresight) to see the potential in the stock market that the local investors failed to see.

She however expressed delight that the local investors have also started seeing the potential of the stock market, adding: "We started the year with 80 per cent on a daily basis by value of foreign investment in the market but today we have 70 per cent. So I think that the local investors are also starting to see the opportunities."

According to the CBN database, $12.64 billion total capital importation recorded as at October 2012 has already exceeded the $7.9 billion recorded for the whole of 2011 by 40 per cent, indicating overall increase in foreign investment in the country on a year-to-year basis.

Other types of investment that also attracted foreign investors FDI in other capital $40.77million, Portfolio Investment in Bonds $436.6 million, portfolio investment in money market instruments $991.3 billion while trade credits and loans accounted for $ 44.53 million and $767.4 million respectively.

However, no foreign investment has been recorded in currency deposits since beginning of the year.

Further analysis of the report also indicated that over 42.66 per cent of the foreign investment were made in September and October, as earlier data in August 2012 had shown total capital importation of $8.86 billion.

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