EQUITY INVESTORS STILL SCARED BUT LESS SO

From all indications equity investors are still scared of Nigeria under Buhari but the scramble to get out seems to have come to an end.
According to January figures of domestic and foreign portfolio participation in equity just released by the Nigerian stock exchange outflow has dropped and inflow barely down on December 2015 levels.
The outflow in January 2016 was N26.36bn down 23.2% on N34.3bn in December and 48.4% on N51.08bn by January 2015.
But then, inflow did not show awakening love yet. It stood at N17.01bn in January this year just slightly down on December's N17.04bn and more remarkably by 64.6% on January 2015 when Jonathan was still in power.
And it was not just a question of in and outflow from the country alone. Total domestic and foreign portfolio participation in equity by January this year at N84.1bn was 55.7% down on January 2014's N189.72bn and 22.9% below N110.56bn in December 2015.
Interestingly, it is domestic investors who are still more scared. By December they invested N59.21bn but this dropped by 31.2% to last January's N40.73bn.
The drop in foreign participation within the same one month came to 15.5% from December's N51.35bb to N43.37bn. Compared to January 2014, percentage drops in both were almost at par (56.2% for foreign and 55% for domestic).
Broken down further, the ones who are far from being in love are domestic institutional investors. At N21.85bn in January their participation dropped the most on December levels. It dived by 45.6% on December 2015's N40.18bn although by only 28.4% on January 2015's N30.53bn.
On the other hand, domestic retail exposure at N18.88bn last January was 68.6% down on a year ago (N60.08bn)  but only slightly lower than December 2915's N19.03bn.
The chances are that institutional investors are now cultivating outlets with less risk like bonds compared to equity with corporate fortunes undergoing dramatic stress. Yet equity participation is equally needed to boost production of goods and services at a time government expenditure is more likely to boost demand.

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