FOREIGN PORTFOLIO INVESTMENT FLOW (FPIF) AND NIGERIAN STOCK EXCHANGE (NSE)

Abstract

This work scrutinized the association linking Foreign Portfolio Investment Flow (FPIF) and Nigerian Stock Exchange NSE) (1981-2022). To accomplish the primary goal, FPIF was represented by Equity Foreign Portfolio Investment (EFPI), Bond Foreign Portfolio Investment (BFPI), Money Market Instrument Foreign Portfolio Investment (MMIFPI), and Nigeria Stock Exchange represented by Total Market Capitalization (TMKTC). An ex-post facto research design was used for this investigation. Data for investigation was primarily secondary data; from NSE reports, CBN statistical Bulletins, World Development Indicators (WDI), and IMF World. After that, the unit root test determined stationarity, and then the Johansen co-integration test examined long run relationship among variables under study. It employed the E-VIEW 9.0 for analysis. The finding revealed that EFPI has positive insignificant effect on TMKTC while BFPI and MMIFPI have positive considerable consequence on TMKTC. Based on these findings, it recommended strong supervisory and regulatory structure to ensure strict compliance with various policies targeted at tracking and controlling indiscriminate capital transmission through EFPI. Keywords: Foreign Portfolio, Nigerian Stock Exchange, Investment Flow, Security, Marketability, Liquidity Transformation.