BusinessDay
NigeriaDecides2023

Domestic investors beat foreigners in Nigeria’s N1.66trn H1 equities deal

…account for 85.35% or N1.418bn

Nigeria’s equities transactions rose to N1.662trillion in half-year (H1) to June 30, 2022 compared with N 1.034trillion recorded in H1’2021.

According to the June 2022 domestic and foreign portfolio investment report released by the Nigerian Exchange Limited (NGX), foreign investors accounted for only N243.48billion or 14.65percent of the H1’2022 equities transaction as against N221.96billion or 21.46percent in H1’21.

In the review period, foreign inflow into Nigeria’s equities market was N120.51billion while foreign outflow was N122.97billion as against foreign inflow of N105.24billion and outflow of N116.72billion in H1’21.

Also, in H1’2022 domestic investors equities transactions were valued at N1.418billion or 85.35percent of the total transaction as against H1’21 low of N812.46billion or 78.54percent of the total transactions in H1’21.

Transactions by domestic retail investors in H1’22 were valued at N452.14billion as against N335.29billion in H1’21 while their institutional counters accounted for transactions worth N966.43billion in H1’22 as against N 477.17billion in H1’21.

The Nigerian Exchange Limited (NGX) polls on a monthly basis, trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

As at June 30, 2022, total transactions at the nation’s bourse decreased month-on-month (MoM) by 74.23percent, from N607.45billion (about $1.45billion) in May 2022 to N156.52billion (about $371.53million) in June 2022.

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The performance seen in June 2022 when compared to the performance in June 2021 (N100.77billion) revealed that total transactions increased by 55.32percent. In June 2022, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by circa 46percent.

Further look at the total transactions executed between June 2022 and May 2022 revealed that total domestic transactions decreased significantly by 72.16percent, from N562.15billion in May to N114.33billion in June 2022. Similarly, total foreign transactions decreased by 6.87percent from N45.30billion (about $108.02million) to N42.19billion (about $100.15million) between May 2022 and June 2022.

The domestic and foreign portfolio investment report is prepared on a monthly basis by NGX Regulation Limited, with trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

Institutional investors outperformed retail investors by 22percent. A comparison of domestic transactions in June and May 2022 revealed that retail transactions decreased by 40.54percent from N74.19billion in May 2022 to N44.11billion in June 2022. Also, the institutional composition of the domestic market decreased by 85.61percent from N487.96billion in May 2022 to N70.22billion in June 2022.

Over a 15-year period, domestic transactions decreased by 58.80percent from N3.556trillion in 2007 to N1.465trillion in 2021 while foreign transactions also decreased by 29.38percent, from N616billion to N435billion over the same period. Total domestic transactions accounted for about 77percent of the total transactions carried out in 2021, while foreign transactions accounted for about 23percent of the total transactions in the same period.

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