Following the scarcity of foreign exchange, a double-digit inflation that eroded investment, political uncertainty, among others, foreign investors’ outflow in the domestic stock market dropped by 20.6 Per cent to N183.47 billion from N229.62billion reported in 2021.
This means that domestic investors participation in the stock market surpassed foreign investors by 83.68 per cent in 2022 from 77.12 per cent reported in 2021, while foreign investors exposure dropped further to 16.32per cent in 2022 from 22.88 per cent in 2021. Between 2016 and 2022, domestic investors outpaced foreign investors as analysts stated that shields the market from the impacts of funds outflow from emerging markets and global headwinds.
The stock market in 2022 was faced with mixed outcomes following the action of the Central Bank on its monetary policies. “So, while local investors’ dominance has helped to reduce the usual volatility associated with the market, the near absence or low level of foreign portfolio investors’ participation in the market has denied the Nigerian foreign exchange market the optimum level of liquidity required to support the drive for economic growth. Therefore, local and foreign participations in the good mix are essential for the development of the market, ”he added.
On his part, the Chief Operating Officer, Supra Commercial Trust Limited, Mr. Charles Fakrogha explained that, “Recently, domestic institutional investors have dominated the stock market. I will not blame foreign investors for exiting the market as they are here for a short time. Once there is any negative report in the domestic stock market, the next thing is for foreign investors to move their portfolio to another market.
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