Markets

Equity investment attracts $4.62bn capital importation in 2017

by TELIAT SULE

March 4, 2018 | 5:56 am
  |     |     |   Start Conversation

Equity investment accounted for the largest capital imported into the country in 2017, the analysis of the recently released capital importation data by the National Bureau of Statistics (NBS) has shown. The data shows that portfolio investment attracted $4.62 billion representing 38 percent of the $12.23 billion imported into the country last year.
Investors imported $979.44 million as equity investment foreign through direct investment (FDI) and $3.64 billion as equity investment through portfolio investment (PI). That was in sharp contrast to $1.90 billion imported into the country in 2016 for the both equity investment (FDI) and equity investment (PI).
Money market instruments attracted $3.21 billion in the form of portfolio investment representing 26.24 percent of the total capital imported to Nigeria last year.
Broadly, capital importation took the forms foreign direct investment (FDI), portfolio investment (PI) and other investment. Portfolio investment (PI) attracted $7.33 billion which amounted to 59.93 percent of the total capital imported. PI took the forms of equity, bonds and money market instruments. Majority of the PI inflows went into equity and money market instruments.
Other investments(OI) took the forms of trade credits, loans, currency deposits and other claims. Collectively, other investment attracted $3.92 billion representing 32 percent of the capital imported into the country in 2017. When disaggregated, loans attracted $3.16 billion representing 81 percent of the inflows categorised as other investment and 26 percent of the total capital imported into the country in 2017. Other claims got $739.6 million; trade credit got $10 million while currency deposits got $3.52 million.
In 2017, a number of listed firms with significant foreign interests raised funds through Rights Issue. Examples include Union Bank of Nigeria (UBN) and Guinness. Foreign shareholders control 85.89 percent shareholding in Union Bank of Nigeria Plc which raised N49.75 billion in 2017 through rights issue. Guinness Nigeria raised N39.70 billion through an rights issue that opened between July 24 and August 30,2017.

Source: NBS

“Renewed FPIs appetite for Nigerian assets is driven by attractive yields environment, cheap market valuation and most importantly, stable FX regime. In addition, the upsurge in the money market inflows may be traceable to market expectation of a near-term rate cut in Q4-17. We particularly commend the CBN’s forex policies and hold a stable outlook for forex and reserves amid stable crude prices”, a note from United Capital states.

 

TELIAT SULE


by TELIAT SULE

March 4, 2018 | 5:56 am
12893  |   93   |   0  |   Start Conversation

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