Nigeria’s stock market recorded significant increase in the level of foreign outflows, which increased by 97.80percent from N27.81billion in January to N55.01billion in the trading month ended February 28, 2019. This level is against foreign inflows which increased by 91.24percent from N22.97billion to N43.93billion between January and February 2019.
According to the Nigerian Stock Exchange (NSE) in its recently released report on domestic and foreign portfolio participation in equity trading, the total transactions at the Nigerian bourse in the review month increased by 54.06percent, from N122.08billion recorded in January 2019 to N188.08billion (which represents about $613.9million) in February 2019.
The total transactions seen in the month of February 2019 when compared to that of February 2018 reveals a decline by 11.30percent year-on-year (yoy).
The record total transactions were executed by domestic and foreign investors, with domestic investors further categorised into retail and institutional investors. As at February 2019, the total value of transactions executed by foreign investors outperformed those executed by domestic investors by 6percent.
The transactions executed between the review month of February and prior month (January 2019) revealed that total foreign transactions increased by 48percent, from N66.85billion in January 2019 to N98.94 billion in February 2019.
Analysis of domestic transactions show that the value of the total transactions executed in the domestic market by institutional investors’ outperformed retail investors by 8percent.
When compared to prior month of January 2019 transactions, it reveals that the total retail transactions increased by 38.26percent, from N29.66billion in January 2019 to N41.01billion in February 2019.
The institutional composition of the domestic market also increased significantly by 88.15percent, from N25.58billion in January 2019 to N48.13billion in February 2019. This indicates a higher participation by institutional investors’ over their retail counterparts in February 2019.
The Nigerian Stock Exchange’s domestic and foreign portfolio investment report is prepared on a monthly basis, with trading figures from market operators on their domestic and Foreign Portfolio Investment (FPI) flows. These transactions are carried out by Domestic and Foreign investors.
The foreign and domestic transactions trend shown in the report highlights the performance of the market over the last decade.
Between 2011 and 2015, foreign transactions consistently outperformed domestic transactions. However, domestic transactions marginally outperformed foreign transactions in 2016 and 2017, and remained almost at par in 2018.
Foreign transactions which stood at N1.539trillion in 2014 declined to N1.219trillion in 2018, representing N320billion decrease. Over the twelve (12) year period, domestic transactions decreased by 66.68percent or N2.37trillion, from N3.556trillion in 2007 to N1.185trillion in 2018.
Total foreign transactions accounted for about 51percent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49percent of the total transactions in the same period.
