The total value of domestic and foreign transactions on Nigerian Exchange Limited (NGX) for the first five months of the year 2022 has recorded a total sum of N1.506 trillion. This record shoots higher against N933.65 billion, which was the total transactions carried out by both domestic and foreign investors in the corresponding period of January to May 2021.
In a report released by NGX Regulation Limited on behalf of NGX, the Domestic and Foreign Portfolio Investment (FPI). May 2022 report captured these transactions as well as trading figures from market operators. Domestic investors have continued to hold ground on the floor of the NGX despite rising inflation and currency volatility.
Further analysis has shown that foreign transactions stood at N201.29 billion. Accounting for about 13.37% of the total transactions carried out from January to May. While domestic transactions constituted N1.304 trillion, representing 86.63% of the total transaction, outperforming the foreign investment during the same period.
Analysis of the report
Analysis of domestic transactions showed that institutional investors outperformed retail investors. Retail transactions pulled N408.03 billion in investment, while institutional investors’ investment amounted to N896.21 billion from January to May 2022.
For May, total transactions at the nation’s bourse increased by 195.05% from N205.88 billion (about $494.26 million). In April 2022 to N607.45billion (about $1.45 billion) in May 2022. transactions increased. In May 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 86%
However, “Over fifteen years, domestic transactions decreased by 58.80% from N3.556 trillion in 2007 to N1.465 trillion in 2021. While foreign transactions also decreased by 29.38% from N616 billion to N435 billion over the same period.”
What you must know
The stock market regained more confidence at the start of the year, with key drivers like BUA Foods. Investors’ reaction to companies’ full-year earnings and dividend declarations; predominance of domestic players over foreign players in the market, and low yields in the fixed income market. Which forced investors to consider more profitable securities in the equity market.
Capital market analysts stated that local investors are taking advantage of the incredibly low prices of stocks in NGX to increase their investments.
They observed that the development is good for the local bourse. Saying that it would restore credibility and stability to the market. Which was hitherto marred by volatility occasioned by the activities of foreign investors.