According to the Nigeria Exchange, it revealed that foreign participation in Nigeria equity dropped in January 2024. The foreign participation was 13.92% and 12.76% in the previous and corresponding month of 2023. The participation dropped to 8.15% in 2024.
Nigeria Stock Market recorded a total of N651.52 billion in January 2024, N53.11 billion was recorded as a foreign investment and N598.41 billion is a domestic transaction. Nigeria Stock Nigeria recorded a N343.9 billion investment last month of 2023.
Although the foreign investment in Nigeria has been reducing over the years since Covid-19 period and has remain underwhelming due to the current inflation in Nigeria, FX instability and Dollar liquidity. Foreign investors has been unable to receive their earning which has been a limiting factor that discourage foreign investors to invest in Nigeria Market.
As a result of low foreign inflows and high demand for the greenbacks, the naira has depreciated by 41% and 21% YTD against the US dollar at the official and parallel market respectively.
“In a bid to manage FX volatility in the country, the CBN has rolled out several guidelines and circulars to the various market stakeholders in the country, ranging from commercial banks, IMTOs, BDCs, amongst others”.
“Some of these reforms include the unification of the foreign exchange market, bank reduction of Net Open Positions to 20% for short and 0% long in a bid to curb market speculative activities. The apex bank also removed all limits on margins for IMTO remittances, while introducing a two-way quote system”.
“However, despite the increased level of FX supply at the official market, the exchange rate has remained around the region of N1500/$ and N1600. Hence, the need to attract fresh dollar inflows to improve supply”.
