Offshore investors continue to dominate transactions on the Nigerian Stock Exchange (NSE) in spite of huge outflow of capital to well structure and lower risk assets in the developed world last year, the chief executive officer of the exchange has said.
Oscar Onyema, CEO of NSE said on Monday that foreign portfolio investments outpace domestic participation by 1.74 percentage point in 2018.
According to him, offshore investors accounted for 50.87 percent of total transactions in the market last year compared with 49.13 percent by domestic investors.
However, Onyema said the market experienced 50.53 percent increase in foreign capital outflows last year due to factors which include a shift to higher-yielding assets with lower risks in the developed countries by offshore investors.
Capital outflows rose to 605.54 billion naira in 2018 compared with 402.26 billion naira in the previous year.
Onyema projected that political risk due to the forthcoming election coupled with prospect oil price volatility could drive the market index down this year.
“We anticipate volatility in equities markets in the first half of 2019,” the Exchange CEO predicted, noting that the second half of the year will witness stability after the election.
“We believe swift approval and implementation of the 2019 budget will have a positive impact on companies’ earnings as well as consumer spending. “Therefore, we expect a return of primary market activities during the year with an uptick in market activity during the second half of 2019.”
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