The Nigerian Stock Exchange (NSE) recently published its Foreign Portfolio Investment (FPI) report for the month of Aug-2017.
According to the report, total market transactions from January to August surged 83.3 percent to 1.5 trillion naira compared 0.8 trillion naira in the same period in 2016.
FPI transaction jumped 244.3 percent from 60.5 billion naira in July and YTD average of 141.5 billion naira to 208.3 billion naira in Aug as foreign appetite for Nigerian equities increased significantly.
As such, FPIs participation rate (52.5 percent) for the month of August exceeded domestic participation for the first time in 2017, slashing domestic participation rate to 47.5 percent.
Evidently, faster foreign inflows into equities, up 3.3x to 165.5 billion naira in August, outpacing outflows which rose 1.9x to 42.9 billion naira, accounted for the above.
Net inflows rose to its highest at 122.6 billion naira, 7.5x more than 16.4 billion naira July.
In our view, the above corroborates the sustained momentum in the Nigerian equities market which currently outperforms global peers at +36.7 percent YTD and +3.7 percent MTD, amid improving macroeconomic variables and solid earnings expectation.
Going forward, increasing momentum at the investors and exporter FX window which recently recorded a surge in the weekly transaction is expected to continue to drive activities as Q3-17 earnings are anticipated to trigger further demand for local equities in the near-term.
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