SWITZERLAND, SEPTEMBER 1 – Foreign Portfolio Investment, FPI, inflow to the Nigerian economy has recorded massive decline in the first seven months of 2020 (January-July) amidst growing negative macroeconomic numbers.
FPI mirrors the confidence level of foreign investors in the economy. The investments are made in the stocks of leading companies in the Nigerian Stock Exchange, NSE.
According to Financial Vanguard, investigations reveal that total FPI inflow, so far this year, stood at N143.65 billion while ouflow is N287.57 billion, yielding a negative flow of N143.92 billion. The negative flow is 228 per cent higher than the N43.87 billion recorded in the corresponding period of 2019.
Development economists and financial experts told Financial Vanguard that the trend would lead to further pressure on the Naira exchange rate as the exiting foreign investors pull their cash from the nation’s foreign reserves.
Moreover, the withdrawal of the FPIs has put pressure on the nation’s stock market, forcing stock prices to crash with year-to-date losses to investors at -5.7 per cent as at last weekend.