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Economic Downturn: Foreign Inflow DeclinesTo N17.01bn In Jan 2016

Sam Diala
Activities in the Nigerian Stock Exchange (NSE) witnessed significant drop in foreign inflow in the month of January 2016 to an all-time low of N17.01 billion – reflecting the biting effects of the current economic downturn in the country.
The figure represents a slight difference in the N17.04 billion recorded in the preceding month – December 2015, and N31.02 billion or 54.83 per cent difference in the corresponding period (January 2015) when foreign inflow hit N48.03 billion.
Report on domestic and foreign portfolio participation in equity trading for January 2016 published by the NSE Monday showed significant drop in activities in the Nigerian bourse for the month which is an indication of the harsh economic challenge that business environment is generally confronted with.
The report also revealed that total transactions on the Nigerian bourse for the period dropped significantly from N110.56 billion in December 2015 to N84.10 billion representing 76.06 per cent decrease.
Compared to N189.72 billion booked in the corresponding period (January 2015), the report showed a decrease of N105.62 billion representing 79.62 per cent drop.
Foreign transactions continued to dominate the equity market, as it has been the trend, pushing domestic component down to N40.73 billion as against a total of N43.37 billion foreign input to the market in January 2016.This represents a difference of 48.43 per cent and 40.73 per cent respectively.
Compared to the preceding month’s figure of N51.35 billion, and N90.61 billion recorded in the corresponding period, foreign transactions in the nation’s bourse in January 2016 was, generally, a reflection of the economic downturn that characterised virtually all sectors.
Specifically, foreign component was 52.24 per cent and 46.45 per cent for December and January 2015 respectively.
The report also revealed that total foreign outflow for January 2016 was N26.36 billion as against N51.08 billion and N34.31 billion recorded in the preceding and corresponding periods respectively.
“Domestic investors conceded about 3.14% of trading to foreign investors as Domestic transactions decreased from 53.55% in December 2015 to 48.43% in January 2016 while FPI transactions increased from 46.45% to 51.57% over the same period.

“Monthly foreign outflows outpaced inflows which was consistent with the same period in 2015. However, there was a 23.17% decrease in foreign outflows from N34.31 billion in December 2015 to N26.36 billion in 2016. Also, foreign inflows decreased by 0.18% from N17.04 billion in December 2015 to N17.01 billion in January 2016,” the report entitled “Domestic and Foreign Portfolio Participation in Equity Trading for January 2016”, stated.
Furthermore, domestic retail and domestic institutional activities for the reporting period was N18.88 billion and N21.85 billion as against N60.08 billion and N30.53 billion respectively for the preceding period.
For the corresponding period, it was N19.03 billion and N40.18 billion respectively.
Activities in the nation’s bourse have been seriously hit by the sharp decline in price of crude oil in the international market which dropped from over $100 per barrel to below $40 per barrel. It was $35.76 billion per barrel as at last Monday.

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