Economy News Extra Foreign News Feature/Analysis

Portfolio investments, others boost capital inflows in Q3- NBS

 

The National Bureau of Statistics (NBS) has reported a substantial increase in the nation’s capital importation in the third quarter of this year, peaking at $4.15 billion.

Capital importation is classified into three main investment types namely, Foreign Direct Investment (FDI), Portfolio Investment and Other Investments, with each comprising various sub-categories.

The value of capital importation for the quarter which was substantially higher than the preceding quarter’s value represented an increase of 147.5 per cent on a year-on-year basis. It also showed the first time the capital inflows rose above $4 billion since 2015.

The Bureau linked the boom in capital importation in third quarter of 2017 to “significant growth in both portfolio investment and other investment.”

According to the nation’s official statistics’ producing agency, Portfolio Investment, which was recorded at $2.77 billion in the quarter under review, remained the largest component of capital import and contributed about 67 per cent of the total amount.

Noting that this component of capital importation expanded faster than the other two main categories with a year-on-year growth rate of 200.7 per cent, the NBS’ analysis showed that FDI recorded $117.6 million, dipping by 65.5 per cent year-on-year, while other investment increased by 124.55 per cent compared to the corresponding quarter of 2016.

The Bureau reported further that although Other Investment in the quarter under review more than doubled the value recorded in the corresponding quarter of last year from $516.2 million to $1.26 billion, it remained about 30 per cent of the total capital importation. The data showed that share capital investment, which is closely related to Equity investment (FDI and Portfolio), was largely responsible for huge increase in capital importation during the quarter.

A decomposition of the capital importation value on source basis indicated that the percentage of shares sustained its increase trend since the first quarter of 2017, accounting for 66.24 per cent of the total capital importation in the quarter under review.

A further analysis of the report showed that in Q3 2017, out of the $4.15 billion capital investment, $2.75 billion was invested on shares and the value grew by 324.86 per cent year-on-year.

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