Most foreign portfolio investors based abroad are staying out of naira debt denominated securities; this shows that Nigeria’s debt markets are now controlled by local investors, Blueprint has gathered.
Portfolio inflow into money market instruments fell from N1.6 billion and N1.4 billion in January and February respectively to just N229 billion and N49 million in April and May respectively.
On the flip side, those that still have their investment stuck in Nigeria, have stayed away from any other type of investment except money market instruments such as bonds and treasury bills. Most of the investors are waiting patiently for the central bank to fund their dollar purchase so they can exit.
A cursory look at the Central Bank data shows that FPI sharply reversed from $2.30 billion at the beginning of the year (January) to just $67.9 million inflow in April 2020.
According to an Investment analyst, Victor Silas, for June, fixed income rates were liquidity-driven following the ban of locals from OMO and limited investment outlets. OMO bills maturities are creating more liquidity for locals and it is finding its way to the bond market and Treasury bill.
“The 2050 trading below 11 per cent yield and the 364-day Treasury bill closing at 3.4 percent. It just tells you there are a lot of liquidity concerns for locals.”
