Capital Flight: Investors Withdraw N1.77tn from NSE

• Capital Flight: Investors Withdraw N1.77tn from NSE

Lack of clear economic path continues to weigh on Nigeria’s foreign direct investment as investors complain of insecurity and economic uncertainties.

In the last two years, investors have withdrawn a total of N1.77 trillion from the Nigerian Stock Exchange Market (NSE).

Breaking down the number, foreign investors withdrew N435.31 billion in 2017, while another N642.65 billion was pulled out in 2018.

Similarly, foreign transactions represent around 51 percent of the total transactions performed in 2018, while domestic transactions accounted for 49 per cent during the same year.

Ambrose Omodion, the Chief Research Officer, Investdata Consulting Limited, said the earlier the government understands that increase in the number of domestic players in the market will reduce overdependence on foreign investors, the better for the Nigerian Stock Exchange.

He said the stability of the stock market will help support economic growth and boost wealth creation.

“It is the stability in the stock market that supports economic development and growth and also stimulates wealth creation. This stability comes in the form of policy and behavioural pattern of the market that help investors to plan their investment and predict the future.

“But any market that goes up and down as a result of inflow and outflow of foreign investment cannot be predicted, like what is happening in our market today. Domestic investors drove the bullish ascendency in 2007 and 2008. This was after the banking consolidation of 2006 had created awareness about the market and its wealth creation tendency,” Omodion said.