Nigeria's foreign portfolio investment (FPI) in the stock market surged by 167.8% Year-on-Year (YoY) to N118.92 billion in February 2024 from N44.52 billion in the same period of 2023.

This increase was driven by improved liquidity in the foreign exchange (FX) market, following reforms by the Central Bank of Nigeria (CBN).

The Nigerian Exchange Limited (NGX) revealed this in its Domestic and Foreign Portfolio Investment report for February 2024, showing a 0.3 percentage point rise to 11.78% in the share of FPI in the total equities transaction of N1.009 trillion during the period.

Foreign investors' stake grew by 23.9% Month-on-Month (MoM) to N65.81 billion from N53.11 billion in January 2024. Additionally, foreign portfolio investors' contribution to the total equities transaction increased to 18.39% from 8.15% between January and February 2024.

The Year-to-Date (YtD) FPI inflow at N40.71 billion represents 37.9% of the total foreign investors' commitment, while outflow at N78.21 billion represents 62.1% of the foreign portfolio investment.

Oluwaseun Dosumu, Head of Research at Parthian Securities, commented, "The resurgence of foreign investors in the Nigerian market depends on the policies and dynamics of the foreign exchange market in 2024. The previous year, 2023, saw a weakened state of exchange rate fundamentals within the Nigerian forex market, mainly due to a decline in foreign exchange supply. With the anticipation of an improvement in supply during the year, there is potential for a modest increase in foreign portfolio investment in the Nigerian Exchange."