"Foreign investors return to Nigeria stocks as inflows quintuple"

" Foreign investors return to Nigeria stocks as inflows quintuple \r\n\r\n \r\n\r\nForeign investors are buying Nigerian stocks again after an extended time off sparked by dollar shortages made worse by the Central bank\u2019s capital controls.\r\n\r\nForeign inflows into Nigerian stocks jumped fivefold in the first three months of 2024 to N93.37 billion from N18.12 billion in the same period last year. That\u2019s also the highest amount of inflows in any three-month period since 2019.\r\n\r\nAccording to latest data from the Nigerian Exchange Group, the highest inflows in the period under review came in the month of March when the figure jumped to N52.66 billion- exceeding the N40.71 billion inflows in January and February combined.\r\n\r\n\u201cThe CBN\u2019s reforms have taken Nigeria from uninvestable only a year or so ago to investable this year,\u201d a foreign portfolio manager who invests in Africa said.\r\n\r\n\u201cThe settlement of the FX backlog, shift to a more market-determined exchange rate and a more credible monetary policy are proving too hard to resist for investors.\u201d\r\n\r\nThe naira devaluation also played a role in the outsized inflows but that\u2019s not enough to mask the improving investor confidence in Nigeria.\r\n\r\nThis is evidenced by the fact that while the naira has lost close to 60 percent of its value after two rounds of devaluations by the CBN since June, inflows are up over 400 percent.\r\n\r\nThere was also some selling activity in the market as foreign outflows also surged in the three-month period to N119.81 billion, more than three times the N35.59 billion recorded in the same period last year.\r\n\r\nThat put the total transactions carried out by foreign investors at N213 billion and left a negative net foreign inflow of N26.44 billion, which is the difference between outflow and inflows.\r\n\r\nThe large outflows won\u2019t worry authorities much given the figure is more reflective of the settlement of investors whose funds had been trapped in the market rather than an indication of rotten investor-sentiments.\r\n\r\nNigerian stocks gained 39.84 percent in the first quarter of 2024 with local investors even contributing more to a performance that ranked the Nigerian stock market as the world\u2019s best in Q1.\r\n\r\nLocal investors traded stocks worth N1.3 trillion compared to the N213 billion accounted for by foreign investors.\r\n\r\nThe N1.3 trillion traded by the local investors, both retail and institutional investors, in the first three months of this year is more than double the N476 billion traded in the first quarter of 2023.\r\n\r\nIndustrial goods companies, consumer goods firms and banks drove the 39.84 percent stock rally in the first quarter.\r\n\r\nThe industrial goods index, which tracks the share price movement of companies like Dangote Cement, BUA Cement and Lafarge Cement, rose 78 percent in the three months through March.\r\n\r\nThe consumer goods index, which tracks the prices of the likes of Nestle and Nigerian Breweries, gained 43.66 percent while the banking index which tracks stocks of lenders from Access Bank to United Bank for Africa rose 14.76 percent.\r\n\r\nThe impressive return of the banks stocks in the first quarter of 2024 has however faded with more recent data showing the banking index was down 12.07 percent as at April 19, 2024.\r\n\r\nBank stocks have retreated since the CBN announced a ten-fold recapitalisation exercise that excluded retained earnings from being counted as part of the banks\u2019 share capital.\r\n\r\nMost of the banks, particularly the big ones, have all announced plans to embark on Rights Issues which investors fear could dilute their shares.\r\n\r\nThat has caused a pull back in banking stocks since the March 28 announcement by the CBN giving the lenders 24 months to raise fresh capital.\r\n\r\nNigerian stocks are not the only asset class attracting foreign investors with a significant amount of dollars flowing into the fixed income market after the CBN hiked interest rates by a record to 24.75 percent.\r\n\r\nRead also: Foreign investors hit brakes in Nigeria over volatile naira\r\n\r\nThe improved inflows have contributed to a stable naira although the rising geo-political tensions which has led to a strengthening dollar is threatening to mute foreign inflows into Nigeria and emerging markets.\r\n\r\nThe naira has declined for four straight days in the official market, closing at N1,308\/$ on Wednesday, down from N1,300 the previous day, according to FMDQ data, as dollar liquidity drops.\r\n\r\n \r\n\r\n "

"Foreign investors return to Nigeria stocks as inflows quintuple"

Multichoice Rebuffs Minister’s Claim On DSTV Price Cuts, Cites Market ConditionsAMP

MTN Nigeria Now the Most Capitalized Stock in NigeriaAMP

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025AMP

OPEC+ Nears Decision Point on Next Oil Output HikeAMP

Europe’s Energy Future Hinges on Global PowersAMP

US Companies Cut Investments in China to Record Lows, Here’s WhyAMP

How AI is Rewriting and Enhancing Water Risk ManagementAMP

SheFarms Broiler Edition Kicks Off in Greater AccraAMP

PharmAccess Ghana, Healthcare Federation of Ghana sign SafeCare License Agreement; to use Newest ISQua-Certified Version 5AMP

Multichoice Rebuffs Minister’s Claim On DSTV Price Cuts, Cites Market ConditionsAMP

MTN Nigeria Now the Most Capitalized Stock in NigeriaAMP

Nigerian Stock Market Creates Largest Pool of Billion-Dollar Stocks in 2025AMP

OPEC+ Nears Decision Point on Next Oil Output HikeAMP

Europe’s Energy Future Hinges on Global PowersAMP