By  NKIRUKA NNOROM

The volume of Foreign Portfolio Investment, NSE, inflow into the Nigerian stock market in the 2011 financial year rose to N847.87 billion.

The figure, according to data contained in the NSE’s annual report, represents 46.87 per cent increase over compared to the corresponding period of 2010 and also accounted for 67 percent of the total market transactions for the period.

The President of the Exchange, Alhaji Aliko Dangote, in a statement said the total outflows stood at N335.15 billion, while net inflows for 2011 stood at N177.57 billion, a 4.90 per cent dip over the previous year’s net inflows of N186.71 billion.

He said that the nation’s FPI as a percentage of GDP was a mere 0.47 per cent in 2011  against 0.58 per cent recorded  in 2010 compared to South Africa’s estimated 3.5 per cent  in 2011 and 4.3 per cent in 2010.

Reviewing the market, Dangote said that the NSE remained a predominantly equities-driven market with certain sectors dominating market capitalization. On the Main Board, he said the Financial Services sector led the pack with 30.82 per cent of the board’s total market capitalization; Consumer Goods followed with 30.64 per cent, while Industrial Goods sector accounted for 29.27 percent.

In the Alternative Securities Market (ASeM), Oil & Gas held on to the led with 73.69 percent of the board’s total market capitalization, while Services sector accounted for 13.73.

He noted that the total market capitlisation which closed in 2010 at N10.33 trillion, dropped to N10.28 trillion as at December 30, 2011, while the NSE All Share Index dropped from 24,770.52 points in 2010 to 20,730. 63 points.

In this current year, Dangote said that the NSE will embark on development of its new trading platform and supporting technology infrastructure.

He explained that the implementation of the NASDAQ OMX X-stream market management solution will improve operators and investors’ experience, as well as provide the foundation for future market development, including a virtual private network (VPN) for brokers, market data services, and other relevant high-quality services for the broker-dealer community and wider ecosystem.

He stated that in an effort to enhance the quality of our listed companies, the NSE delisted a handful of companies in 2011, bringing the total number of listed companies to 198 at year-end – from 217 in December 2010.

“Notwithstanding erosion of investors’ confidence, tough market conditions played a major role in deterring retail investors from entering the market, and committed long-term retail and institutional players looked to other investment choices for diversification and liquidity, specifically short and long-term government paper.

As prospective issuers also delayed bringing new instruments to market (i.e., IPOs), investors settled for incentives such as dividends, and bonus and rights issues,” he said.