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Foreign Investment in NSE Drops by 15%

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NSE

The participation of foreign investors in the Nigerian Stock Exchange fell by 15 per cent between January and February this year, data from the NSE showed.

The NSE had put the level of participation by the foreigners at 51.57 per cent for January 2016. But the latest data released by the Nigerian bourse showed that for February 2016, the number dropped to 36.48 per cent.

Despite the fall in foreign portfolio investment at the Exchange, total transaction (comprising domestic and foreign portfolio investments) increased to N117.27bn in February, from N84.10bn in January.

Foreign portfolio investments for the period fell to N42.78bn while foreign inflows also dropped to N10.94bn from N17.01bn.

In the same vein, foreign outflow rose in February to N31.84bn from N26.36bn for January.

The NSE also recorded growth in domestic retail equity deals. The figure rose to N36.24bn in February from N18.88bn in January.

Investments by domestic institutions also rose to N38.25bn in February from N21.85bn the previous month.

The institutional composition of  the  domestic  market increased   by 75.05 per cent, and according to the Exchange, this indicated that institutional  investors slightly  outperformed their retail counterparts in the period under review.

In 2013, there was a major rebound in the domestic   component   which   led   to   an almost equal split  in foreign against domestic transactions.

This led to a drop in 2014 when the FPI outperformed domestic transactions.

In 2015, FPI dropped compared to 2014. However, it slightly outperformed domestic transactions in the same period.

The dwindling returns in the country’s stock market caused foreign portfolio investors to pull out N410.49bn from the equities segment of the NSE between January and August last year.

Just as was the case in 2014, foreign investment outflow exceeded inflow in the first eight months of 2015.

Foreign investors had pulled out N846.53bn from the stock market in 2014 although they invested N692.39bn, a development that caused the NSE All-Share Index to close with a negative return of -16.14 per cent.

The market is dominated by foreign investors. They accounted for 57.52 per cent of total transactions in 2014.

In the first eight months of 2015, foreign investment inflow was N367.10bn, which was N43.39bn less than outflow.

Despite the reported exit of many foreign investors from the stock market and expectations that domestic investors would take advantage of low stock prices, foreign investors still dominated the market, accounting for 54.36 per cent of the N1.430tn transactions in equities as of August.

Further review of the participation statistics showed that foreign portfolio investment outflow exceeded inflow in six of the eight months under consideration.

Inflow exceeded outflow in April 2015, as investor confidence rose after the peaceful conduct of the presidential election, and in June following the change in government. Year-to-date, the NSE All-Share Index has a negative return of -12.40.

The N1.430tn transactions recorded in the equities segment of the NSE in the first eight months of 2015 was, however, 5.8 per cent or N88bn lower than the N1.518tn transactions recorded in the same period of 2014.

The Director-General of the Securities and Exchange Commission, Mr. Mounir Gwarzo, had promised that the commission would work hard to attract more investment and encourage more Nigerians to participate in the capital market.

According to him, the commission will ensure that the market remains vibrant in order to attract local and international investors.

He was quoted as saying, “We will step up to reach out to the market and improve investment. On the international side, what is most important is the enabling environment. Right now the rules are very friendly and that is why we keep changing them from time to time to suit best practices and attract investors.

Mounir also emphasised the need for investor education both for retail and institutional investors as a means to improve the level of investment from the domestic investors.

The Chartered Institute of Stockbrokers had lamented that over 60 per cent of the Nigerian stock market was controlled by foreign investors. He said the situation was a major cause for concern.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Global Deal Activity Down by 4.5% in October 2020

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A total of 6,304 deals were announced globally during October 2020, which is a decrease of 4.5% over the 6,598 deals announced during September, according to GlobalData, a leading data, and analytics company. An analysis of GlobalData’s Financial Deals Database revealed that the deal volume during October remained below the monthly average of Q3 2020.

Aurojyoti Bose, the Lead Analyst at GlobalData, comments: “After demonstrating growth for four consecutive months, the deal volume shrank in October. The decline in deal activity could be attributed to inconsistencies across different regions. The APAC region remained a weak spot, while deal activity remained mostly flat in North America, and the Middle East and Africa (MEA) region witnessed growth in deal activity.”

North America attracted the highest number of investments, followed by APAC, Europe, the MEA, and South, and Central America.

The uncertain global economic landscape lowered the deal volume in October for major markets such as the US, Germany, Australia, France, India, and China compared to the previous month. On the contrary, the UK, Japan, South Korea, and Canada saw growth of 15.6%,14.9%, 3.8%, and 2.2%, respectively, in October as compared to September’s deal volume.

Bose continued: “Most of the deal types witnessed a decline in volume during October compared to the previous month. Private equity, equity offerings, venture financing, debt offerings, and partnership deals volume decreased by a respective 2.4%, 9.1%, 9.8%, 14.6%, and 24.6% – while the deal volume for mergers and acquisitions (M&A) increased by 7.2%.”

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Investment

Japaul to Invest in Chinese Firm H&H to Deepen Mining and Exploration Business

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Japaul Gold & Ventures Plc (Japaul), formerly known as Japaul Oil and Maritime Services Plc, announced it has gotten approval in principle from H&H Mines Limited to invest in or acquire shares in the company once it concluded its fundraising exercise.

According to a statement released through the Nigerian Stock Exchange (NSE), H&H Mines Limited has several licenses, which include two major Mining Leases for 25 years renewable.

The statement noted that extensive exploration has been done on the Mining properties and the last lap of the exploration works is core drilling. This, it said will allow Japaul knows the measured Minerals Reserve contained in the Mine, which it claimed contain Gold, Silver, Lead, Zinc, etc.

Japaul further explained that the need to get the drilling done was what led H&H Mining to engage the services of Xiang Hui International Mining Company Nigeria.

“Since Japaul will eventually be part of H&H Mines Limited, it was necessary that Japaul is carried along on the kind of Contract of Drilling to be entered into, and that was why the signing of the Drilling Contract between the Chinese Company and H&H Mines Limited was concluded at Japaul’s Head Office,” the company stated.

The drilling is expected to be concluded in the next 12 months and within this time, Japaul is expected to have concluded the Fund Raising and formalise her involvement in the Mining.

The company added that Canadian reports revealed that there are huge gold, silver, lead, etc deposits, but it is drilling that will show the actual reserve.

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Africa Investment Forum (AIF) Rescheduled to Hold in 2021 – AfDB

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AfDB

Investment Forum to Now Hold in 2021 in a Bid to Curb Possible Second Wave of COVID-19  

The Africa Investment Forum scheduled to hold in November 2020 in Johannesburg, South Africa has been rescheduled to hold in2021 as a result of the ongoing global health pandemic.

This announcement was made in a statement by AfDB on Wednesday. The African Development Bank (AfDB) and the Africa Investment Forum founding partners agreed to the postponement of the annual three-day investment market place.

Considering the negative effect of Covid-19 on the global economy, agreement by the two bodies was made after a careful assessment of the impact of COVID-19 on global travels, investments, observing the social distancing rules and curbing the likely possible risk of a second wave.

In the statement, the bank stated that through the forum innovative digital platforms, it would track investments, source for new deals, progress on financial closure of transactions and other existing deals.

“At the 2019 Africa Investment Forum, 57 deals valued at $67.7bn were tabled for discussions. Fifty-two deals worth $40.1bn secured investment interest.

“In July this year, the AIF Founding partners pledged to strengthen strategic partnership engagement and commitments for Africa Investment Forum Market Days 2021, to help ‘reboot investments in Africa.’ They underscored the need to boost local manufacturing while leveraging the continent’s vast resources to unlock investment.”

In the statement, Africa Investment Forum objectives are achieved through the forum’s four pillars; Closing, Connecting, Engaging and Investment Tracking.

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