The National Bureau of Statistic published its capital importation report for Q2-17 during the week indicating a 95.0 percent q/q or 43.6 percent y/y expansion in foreign capital into the country.
In contrast to Q1-17, Foreign Portfolio (FPI) and Direct (FDI) investment rose 145.7 percent and 29.8 percent q/q respectively, reaffirming the impact of the investors' & exporters' (I&E) window introduced in April-2017.
FPIs into the equity market surged 502.0 percent to $614.1m in the period, accounting for 34.0 percent of total capital imported compared to 11.0 percent in the prior quarter. Contrariwise, FPI flow into the domestic fixed income market fell 26.1 percent to $156.5 million in the period due to decline in investment in money market securities (down 53.4 percent q/q to $98.6 mmillion). FDI also rose 29.8 percent q/q to $274.4 million due to a 30.4 percent q/q expansion in equity capital inflow into Nigerian corporates. Other investments – majorly loans (up 102.4 percent to $747.5 million)- also saw a 95.0 percent q/q increase to $747.5 million during the period.
On a month-on-month basis, we note that capital flow surged not only in Q2-17(on adoption of the I&E window) but also in February after the Vice President sealed the Niger-Delta peace deal. Accordingly, outlook on funds flow will depend on the stability and implementation of more market friendly policies.
On a month-on-month basis, we note that capital flow surged not only in Q2-17(on adoption of the I&E window) but also in February after the Vice President sealed the Niger-Delta peace deal. Accordingly, outlook on funds flow will depend on the stability and implementation of more market friendly policies.
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