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More Foreign Investors Leave As FPI Flows Crash By 228%

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images 34 2 More Foreign Investors Leave As FPI Flows Crash By 228%

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.
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.
Domestic Investments
However, amidst the negative sentiments from the foreign investors, their domestic counterparts appear to be taking advantage of the situation filling the gaps created by the retreating foreign investors, by buying up the stocks now at lower prices.
Consequently, total domestic portfolio investment rose to N675.55 billion as against total N670.45 billion in the corresponding period of 2019.
Experts comment
Reacting to the latest development in the FPI, the Executive Vice Chairman of Highcap Securities Limited, Mr David Adonri, said: “The prospects of Nigeria’s economy do not give confidence to foreign investors hence their exit.
‘‘The figures above reflects decline of foreign investors’ confidence. Nigeria lacks the capacity to surmount current economic challenges and investors have seen the government running helter-skelter to obtain foreign loans that will not facilitate economic recovery faster.
“With exit of foreign investors, hard currency inflow will plummet causing further decline of Naira. Foreign investors detest anything that will devalue local currency. Nigeria is entering a deadly period of stagflation which may persist till 2021.’’
Also commenting, Prof. Uche Uwaleke, a financial economist and Professor of Capital Market at the Nasarawa State University, said: “Expectedly, prior to COVID-19 there was a remarkable level of foreign investor participation in the stock market.
‘‘Since the pandemic entered the country late February followed by the collapse in crude oil price, country risk heightened in Nigeria leading to lower ratings by global Rating Services such as Moody and Fitch and the exit of many foreign investors.
‘‘As a matter of fact, the signs of foreign investors’ exit began to manifest in December 2019 when domestic investors outperformed their foreign counterparts, a trend that continued into the following year.
“To see clearly what has happened pre-COVID and now, one needs to use the NSE Domestic and FPI monthly reports as a guide. An interesting development to note in these reports is that transactions on the NSE were dominated by foreign investors prior to the pandemic in Nigeria. Except for the months of May, June and December 2019 that witnessed the dominance of domestic investors, foreign investors led transactions throughout 2019.
‘‘But all that has changed since 2020 with domestic investors outperforming foreign investors in relation to transactions executed.
‘‘The NSE reports reveal that institutional investors such as PFAs (Pension Funds Administrators) have been driving trades in the domestic space except for the months of April and May which saw retail investors taking the upper hand.
“Unlike during the 2008 financial crisis when the exit of foreign investors also resulted in significant dampening of sentiments of domestic investors leading to a near-crash of the stock market, this time around domestic investors have risen to fill the void created by their exit. ‘‘I think COVID-19 presents an opportunity to detach the stock market from the apron-string of foreign investors by leveraging the country’s huge population to deepen the participation of domestic investors.”
Regarding the return of foreign investors, he said: “ I think the spread, intensity and duration of the pandemic will determine when the capital market will witness an influx of FPIs.
‘‘Factors that will encourage their return include unification of exchange rates as well as reducing the spate of insecurity in the country.”
Reacting as well, Victor Chiazor, an analyst and head of Research and Investment at FSL Securities and Investment Limited, said: “The rise in foreign portfolio outflow year-to-date (July 2020) was largely as a result of the huge outflows recorded in January (N46.50 billion), February (N52.32billion) and March 2020 (N87.73 billion) as investors sold down to exit their investments on the back of fears around the country’s readiness to deal with the COVID-19 pandemic and the drop in global oil price.”
“The sell-off saw share prices of blue chip companies drop to historic lows as panic selling set in and caused a major dip in share prices.
‘‘Impressively, domestic portfolio investments was higher than foreign portfolio investments year-to-date and we believe this would impact the market positively as these funds will not put pressure on our local market when compared to foreign portfolio investments which are hot monies that could easily be withdrawn from the market and the economy at large once there are signs of economic headwinds.’’
Way forward
Suggesting solutions to the predicament, Uwaleke stated: “The massive rise in foreign outflow suggests the need to diversify sources of earnings for foreign exchange, as some of these investors will be looking at exiting their capital off the shores of the country and, depending on the level of demand for foreign exchange, it may adversely put pressure on the Naira given the level of the country’s foreign reserves.”
Reacting on ways to shore up foreign earnings, he said: “A possible increase in foreign inflow will be supported by the combination of significant improvement in company earnings, continuous rise in our foreign reserves and visible stability in the foreign exchange market, where the Naira is traded at a market determined rate.
“Going into Q3’20 (third quarter 2020), we expect foreign outflows to continue to outweigh inflows especially given the COVID -19 distortions, uncertainties around the value of the Naira and the level of our foreign reserves, but expect a bit of an improvement in the fourth quarter of 2020 as oil prices improve and impacts positively on the country’s FX reserves.”
In their comments, analysts at InvestData Limited said: “ The high foreign outflow was as a result of socioeconomic uncertainty associated with the COVID-19 pandemic, negative macroeconomic indices and mismatch in policies that had failed to give direction.’’
On the effect to the market, they said “The effect is on market liquidity which will slowdown economic recovery. As the market and the economy are moving in opposite direction, the prevailing low rates and yield have continued to push funds into stock market as way of hedging against inflation.
“The domestic investors increasing their stake in the market is good but the government and its economic managers should articulate policies that will support economic stability and the market. At the same time they should educate Nigerians on how to invest profitably in the market which will boost participation.
“The negative impact of the pandemic cannot be totally ruled out but Q3’20 performance would be better than Q2’20 as easing of lockdown continues across the globe.
‘‘With government and CBN intervention expected to start having positive effect on the system, on the whole, investors should have good entry and exit strategies at all time.”

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A Brief History of the Late Emir of Zazzau Alh Shehu Idris from 1936 to 2020

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38c2d3371672415fb4cd6b6b60d0a5bd 1600609977891 A Brief History of the Late Emir of Zazzau Alh Shehu Idris from 1936 to 2020

The late Emir of Zazzau His Highness Shehu Idris was born on September 20, 1936 in Zaria.

His father’s name was Malam Idris Auta, better known as Autan Sambo, and his mother’s name was Malama Aminatu Idris.

Malam Idris’ father was Muhammad Sambo who ruled as Sarkin Zazzau from 1879 to 1888, and Sambon’s father was Sarkin Zazzau Abdulkarimi who ruled from 1834 to 1846.

The late Sarkin Zazzau Shehu Idris started his religious studies in Zaria before joining the Elementary School from 1947 to 1950, during which time he lost his father when he was only 12 years old.

In 1950 he joined the Middle School in Zaria where he graduated in 1955 and then transferred to the Katsina Training College.

In 1958, he started teaching at Hurakuyi Primary School, where he taught in several schools in the Zazzau region.

He also served as the King’s Secretary in 1960, during the reign of Sarkin Zazzau Muhammadu Aminu.

In 1965. [9] to 1973 he was appointed Dan Madamin Zaria, and later he was appointed Head of Zaria.

The late Emir of Zazzau Shehu Idris became the Emir of Zazzau in 1975 after the death of the Emir of Zazzau Muhammadu Aminu.

On January 10, 2015, he organized a grand celebration to celebrate his 40th year on the throne, and on February 8, 2020, he celebrated another 45th anniversary on the throne of Zazzau.

In short he was the 18th King of Zazzau since the Jihad of Dan Fodiyo and came from the Katsina royal family, as it is known that there are three royal houses in Zazzau, the Katsina palace and the Mallawa palace and then the Barebari palace.

The emir died at the age of 84 on Sunday, September 20, 2020 at about 11am at the 44 Army Barack Hospital in Kaduna.

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Buhari, ministers in FEC meeting

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images 77 2 Buhari, ministers in FEC meeting

The President , Major General Muhammadu Buhari ( retd .) , ministers and some other top government officials are currently meeting.
They are meeting under the auspices of the Federal Executive Council .
Buhari is presiding over the virtual meeting from the Council Chamber of the Presidential Villa, Abuja .
While some members of the council are with him at the venue , some others are participating in their offices .
Details later …

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Without effective response to COVID-19, UN would have failed —Buhari

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images 74 2 Without effective response to COVID-19, UN would have failed —Buhari

The President , Major General Muhammadu Buhari ( retd . ) , says if the United Nations system cannot mobilise the world to marshal out an effective response to the COVID- 19 pandemic , then the organisation would have failed in its core mission .
Buhari said this late Tuesday while delivering Nigeria ’s National Statement via video -message , on the first day of the 75 th session of the UN General Assembly Debate .
The theme of this year ’ s General Assembly is ” The Future We Want , The United Nations We Need : Reaffirming Our Collective Commitment to Multilateralism – Confronting Coronavirus Through Effective Multilateral Action . ”
Buhari promised that Nigeria will continue to partner with the World Health Organisation and some countries to ensure accelerated development and manufacturing, as well as the uninhibited supply of safe and effective Coronavirus vaccines to all .
He also pledged Nigeria ’ s commitment to working with member states in the spirit of global cooperation and solidarity to promote human health and general well – being.
He said , ” As we reflect on the future we want and the United Nations we need , we must realise that the people of the world not only look up to us : they count on us .
” If the United Nations system cannot mobilise the world to marshal out a truly effective and inclusive response to the coronavirus pandemic , then the United Nations would have failed in the core mission of giving expression, direction and solution to the yearnings of the international community.
” The future we want must guarantee human rights , human dignity , human prospects and prosperity. The principles of ‘Leaving No One Behind and Doing No Harm ’ must be expressed through accountability , strategic growth initiatives and elimination of threats of all kinds. ”
Buhari boasted that his regime had come up with different measures to provide a future of hope for Nigerians. He mentioned the implementation of the Economic Sustainability Plan and the Medium Term National Development for the period 2020- 2025 and 2026 – 2030 as parts of the measures put in place by his regime .
” We expect that these ambitious initiatives will deliver sustainable economic growth and development to Nigeria , ” he said .
Buhari expressed concern that the COVID- 19 pandemic has devastated the world economy , straining the capabilities of the health systems of many countries , including Nigeria .
He said , “ In the aftermath of the Coronavirus outbreak in Nigeria , we prioritised vulnerable groups , including women , children , older persons and the unemployed , in our efforts to provide medical and social assistance to cushion the socio- economic effects of the disease .
” Accordingly , we have expanded our National Social Register , to include an additional one million Nigerians. Our National Social Investment Programme has been the vehicle for reaching out to the poor and vulnerable members of the Nigerian population, as well as providing cover for over 12 million households . ”
The President lauded the efforts of the UN and the WHO in combating the pandemic . He applauded the $2 bn Global Response Plan launched by the UN Secretary- General to fund the coronavirus response in the poorest countries .
The President also commended the Secretary -General ’ s call for a cease – fire in conflict areas to enable humanitarian assistance reach groups vulnerable to Coronavirus.
He said his regime had commenced the disbursement of N 10. 9bn to households on Micro , Small and Medium Enterprises as palliatives as part of measures to reduce poverty.
He added that N 500bn fiscal stimulus package and sustained delivery of humanitarian and social interventions to poor and vulnerable households have been established , while the Central Bank of Nigeria launched a N 3. 5trn stimulus package to boost manufacturing and facilitate import substitution .
He urged the international community to cooperate in addressing the scourge of poverty, particularly in developing countries . The President said Nigeria remained concerned over the illicit trade, transfer and circulation of small arms and light weapons , particularly in Africa. He called on the international community to renew efforts to stem this traffic and promote the Arms Trade Treaty in order to codify accountability in the battle against trans – border crimes, including terrorism and acts of piracy.
He also urged world leaders to redouble efforts to ensure collective security. Buhari described terrorist attacks across the globe as a harsh reality of the challenges the world is facing today.
” In Nigeria , we are still facing violent extremism from the insurgency of Boko Haram and bandits .
” We continue to count on our strong cooperation with UN Counter – Terrorism bodies and neighbouring countries to overcome the terrorists in the Lake Chad Basin and the wider Sahel region.
” We will vigorously sustain the rehabilitation , reconstruction and resettlement of victims of terrorism and insurgency in the North East . The North – East Development Commission has been established for that purpose, ” he said .
On illicit financial flows , the President Buhari declared that the global aspiration to recover from the impact of COVID – 19 will not be fully met without addressing structures that make it more difficult for countries to generate and retain their financial resources .
In this regard , the President again thanked Prof . Muhammad – Bande as well as the immediate past President of the Economic and Social Council , Ambassador Mona Jul , for jointly launching the High – Level Panel on International Financial Accountability , Transparency and Integrity ( FACTI ) for Achieving the 2030 Agenda .
On climate change , the President reiterated Nigeria ’s commitment to the revitalisation of Lake Chad. He said , “ We are convinced that recharging the Lake will improve the living conditions of our people in the area , promote inter – state cooperation, strengthen community resilience and assist in addressing environmental and security challenges threatening the region and its resources .”
Buhari renewed his call for international support for the regional efforts to raise $50 bn required to actualise the initiative.
On education , Buhari announced that Nigeria will be hosting the 4 th International Conference on Safe Schools in 2021. ‘
‘ Quality education for all is the cornerstone of sustainable development .
” I invite you all to Nigeria to participate in the Conference which aims to advocate for the protection of education from attack as we work together towards the future we want , ” he said .

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