Two Months on, Flexible FX Policy Fails to Lift Equities Market – Thisday

The Nigerian equities market has recorded negative performance two months after the implementation of a flexible foreign exchange (FX) policy by the Central Bank of Nigeria (CBN).

This is contrary to expectations that the policy will spur inflow of foreign portfolio and domestic investors and lift the market.

The market has shed N151billion in market capitalisation between June 15 when the policy was announced and last Friday, THISDAY analysis has shown. One of the reasons cited for low portfolio inflow into the market was uncertainty about the nation’s FX policy and the CBN’s capital controls.

Available data from the NSE revealed that Foreign Portfolio Investment (FPI) accounted for 40.43 per cent (N189.45 billion) of total transactions on the nation’s bourse in the first five months of the year, down from 57.04 per cent (N519.34 billion) during the same period the previous year.

So when the CBN announced a flexible policy, it was highly expected that the market would rebound on positive reactions to the policy by foreign and domestic investors.

Read more at http://www.thisdaylive.com/index.php/2016/08/29/two-months-on-flexible-fx-policy-fails-to-lift-equities-market/