Capital market commentators and experts have expressed displeasure over non-participation of local investors at the Nigerian Stock Exchange.
They said foreign investors became alerted to withdraw from the capital market following the persistent chronic forex challenges in the country, adding that local investors would have taken advantage of the exit of foreign investors and embrace the nation’s bourse.
The market commentators also said that the distressed Nigerian economy stood a good chance to lose more foreign capital, pointing out that the government had yet to convince investing foreign community of its short-term, medium-term and long-term policy direction.
Managing Director/ Chief Executive Officer, Monitech Investment Company, Ibrahim Sule, said despite the market rebound, foreign investors had not yet taken full position in the market as local investors still dominated active participation of stocks that recorded impressive volume within the period.
Managing Director and Chief Executive Officer of APT Securities and investment Limited, Mallam Garba Kurfi, said foreign investors moved their money to other countries of the world where they were confident of meeting clear policy direction.
He said, “Nigeria’s foreign exchange policy is capable of pushing away investments owing to its persistent depreciation of the local currency. In the immediate, while we expect the ongoing optimism regarding a possible shift to a market determined exchange rate regime to support market performance, we see the impacts of these events on market performance.
“However, in the medium to longer term, we see improved performance on the back of efficiency gains from an expansionary fiscal policy, leading to improvement in aggregate demand.”
He maintained that the overall impact of policy actions would be positive for the economy in the medium to long term, adding that a six-month analysis of the first half showed that the market benefited from the newly introduced market determined foreign exchange policy which was a boost to investor’s confidence.
When asked why local investors failed to take advantage of the exit of foreign investors in the market, Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu said, “If you look at the portfolio of the pension funds administrators, you will see that they are getting underweight in
equities.
“They are shifting much more of their funds to federal government treasury bills and bonds, which simply mean that they have more faith in the fact that interest rates would go up further. We are in an economy where because of unclear economic policies; you cannot say that equity prices will rally.”
