Why Foreign Investors Left Nigerian Capital Market – Operators

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Local investors now have faith in the Nigerian capital market, according to the Association of Securities Dealing Houses of Nigeria.

Sam Onukwe, the chairman of the Association of Securities Dealing Houses of Nigeria, noted that while foreign investors had departed the Nigerian Stock Exchange, more local investors were still trading.

This was said by Onukwe in a statement titled “Key Drivers of Nigerian Capital Market in 2023.”

According to him, “Local investors are developing confidence in the market but on the other hand, foreign investors left because they were losing money.”

Despite the hurdles, he pointed out that the market did reasonably well despite the worldwide effects of Russia’s invasion of Ukraine.

In order to determine the investment environment and stimulate activity in the Nigerian financial market in 2023, Onukwue identified a number of factors, including security concerns, the rate of inflation, taxation of market instruments, particularly the Capital Gain Tax, which acts as a deterrent to investors.

The above 20% gain recorded by the NGX was laudable, he said in his review of the market for 2022.

He continued by saying that if not for the ongoing revisions to the Monetary Policy Rate, the rising rate of inflation, and the erratic exchange rate that characterized investment activities during the review period, the market would have made more money.

He expressed confidence that improved investment possibilities would result from a more stable monetary policy environment.

He said, “The financial market was unstable for the larger part of 2022 as some fundamental decisions were taken by the government that impacted the market.

“Constant movement of the Monetary Policy Rate forced investors to look for higher interest margins.

“The inflation galloped in the period and people were looking for real value. Exchange rate also constituted a challenge as foreign portfolio investors abandoned the market while local investors dominated the market.”

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