Investors in the companies quoted on the nation’s stock market recorded a loss of about N519 billion in 13 trading days in the month of November following sell pressure that has persisted in the equity market.
As at yesterday, the market capitalisation of the Nigerian Stock Exchange NSE), which gauges the value of listed stocks, stood at N8.830 trillion as against opening figure of N9.349 trillion recorded at the close of trading on October 31, 2016, accounting for a loss N519 billion or six per cent. Poor market sentiments had worsened following investor apathy, which had made foreign and local investors to remain on the sidelines due to upset in the financial market.
Financial analysts believe some of these factors sent a shock wave to both local and foreign investors and created uncertainty in the investment environment, which led to retreat on the part of the bargain hunters.
According to reports from FSDH Research, the total capital imported into the Nigerian economy in Q3 2016 was $1.82 billion, a fall of 33.7 per cent from $2.75 billion recorded in Q3 2015, but an increase of 74.84 per cent from Q2 2016.
“This is according to the National Bureau of Statistics (NBS). The highest level of capital imported was in August 2016, representing the highest level since July 2015.
Capital imported in September 2016 stood at $649.76 million, representing the second highest level of capital imported in any month in Q1 2016 and Q2 2016.
“Unlike in the prior quarters, where other loans were responsible for majority of the increase, a number of investments types contributed to the quarterly increase. Yearon- year (y-o-y), the capital importation declined for each broad type:
Foreign Direct Investments (FDIs), Foreign Portfolio Investments (FPIs), and other Investments. FDIs recorded the largest decline of 52.54 per cent y-o-y, compared with declines of 45.05 per cent and 8.80 per cent for other investment and FPIs respectively,” the report noted.
The report explained that FDIs recorded an increase of 84.84 per cent, while other Investments recorded an increase of 7.80 per cent. FPIs regained its position as the largest investment type and accounted for 50.51 per cent of the foreign capital in Q3 2016. FDIs and other investment accounted for 30.80 per cent and 18.69 per cent of the total capital imported during the period respectively.
“A significant portion of the FPIs was recorded from debt financing as portfolio investment in Bonds and Money Market Instruments took the lead. Portfolio Equity, on the other hand, recorded a decline of 28 per cent quarter-onquarter, but the increase in other types of portfolio investment more than offset the decline from equity.
“Bonds increased from zero in the Q2 2016 to $369 million in Q3 2016 while money market instruments increased by 509 per cent from $57.5 million.
This is the first quarter since Q2 2007 in which equity was not the largest part of portfolio investment. “Equity at $201.12 million remains considerably subdued relative to previous highs of $4,930 million in the Q1 2013 and $3,875 million in Q2 2014. This highlights the fact that equity investment has been hit severely by the recent economic events,” the report added