The study examined the impact of capital market on foreign portfolio investment in Nigeria for the period 1986 to 2014. The study specifically assessed the relationship between market capitalization, all share index, total new issues and foreign portfolio investment in Nigeria. To achieve these objectives, the study adopted the ex-pose facto research design. The desk survey method was used to collect time series data from the CBN statistical Bulletin for the period under study. The ordinary least squared multiple regression technique was used to analyse the data. Result from the analysis showed that there exist positive and significant relationships between market capitalization and foreign portfolio investment. Also, it was revealed that all share price index had an inverse but significant relationship with foreign portfolio investment in Nigeria and finally, total new issue had a positive but insignificant relationship with foreign portfolio investment in Nigeria. Based on these findings, it was recommended that the regulatory authorities should ensure that abuses and sharp practices are completely eradicated from the market to enhance transparency and fair play and boost the confidence of foreign investors to retain and increase their investments in the market. Also government should relax the listing requirements of both the first and second tier securities markets to encourage more domestic firms and foreign firms to be listed to be listed as this will enhance more portfolio investment in the market and lastly government should introduce more investment instruments such as derivatives, convertibles, future, and swaps options in the market to give foreign investors more avenues to invest their securities.
