The value of Foreign Portfolio Investments, or FPIs, in equities reversed the declining trend to record N243.48 billion in the first half of 2022, or H1’22; this represents a 9.7% YoY increase from N221.96 billion in the corresponding period of 2021, suggesting that foreign portfolio investors have made a significant return to Nigeria’s stock market.

The Central Bank of Nigeria’s (CBN) expansionary monetary policy regime for the most of H1’22 and the strong equities performance in 2021 have been cited by stock dealers and analysts as the reasons for the development.

Following the CBN’s return to strict monetary policy in May 2022, the analysts claimed the driving variables had already reversed, making it improbable that the recovery would last into the second half of the year, or H2’22.

Additionally, analysts believe that another issue that might erode FPI confidence is the run-up to the general election in 2023.

As the CBN’s monetary policy encourages fixed income investments, stock prices have already begun plunging.

In the meantime, foreign investors’ share in the whole stock market turnover increased by 14.6% in H1’22 as opposed to 21.46 percent in H1’21.