The past six years have seen transactions by foreign portfolio investors (FPIs) at the Nigerian Stock Exchange (NSE) rise to about N4.061trn, BusinessDay checks at the Nigerian bourse have shown.

    These transactions by foreign investors, which resulted in either inflow of investible funds at the Nigerian stock market, include purchase transactions (equities only) and sales transactions or liquidation of portfolio investments.

    In the post market crisis era, there has been renewed appetite for Nigerian equities by foreign portfolio investors as African stock markets continue to outperform global equities in terms of returns.

    The increasing presence of foreign investors at the Nigerian bourse is reflected in the five-month (January to May 2013) figures recently polled by the Nigerian Stock Exchange.

    A breakdown of the figures shows that in 2007, foreign portfolio investors brought into the Nigerian equities market, about N256bn, and they took away N360bn, resulting to a total of N616bn.

    Further in 2008, when the stock market crisis peaked, fund inflows from foreign investors, was put at N154bn, representing total transactions of N787bn.

    In 2009, foreign portfolio investors staked N229bn and took away from the same market, about N196bn, representing a total flow of N425bn.

    Out of a total transaction of about N577bn in 2010 by foreign investors, N382bn represented outflows, while N195 was taken away by the investors.

    In 2011, the flow from foreign investors was put at N513bn while N335bn represented outflow, indicating a total of N848bn. At the end of 2012, foreign portfolio investors staked N451bn in Nigerian equities, while they took away from the same market about N357bn, representing a total of N808bn.

    “Rotation to equities increased, as portfolio managers who had hitherto underweighted equities, adjusted their portfolio. Continued drop in yields of fixed-income securities aided the rotation to equities,” analysts at Financial Derivates Company said recently, in their Nigerian market update.

    For instance, from January to May 2013, foreign portfolio investors had brought about N432.40bn into the Nigerian equities market, indicating 48.61 percent of the total N889.51bn worth of transactions recorded by local and foreign investors. Domestic investors staked N457.11bn or 51.39 percent of the total value of transaction.