In August 2023, foreign investors traded 14.15 percent of the overall N262.56 billion in the Nigerian stock market, while domestic investors accounted for 85.85 percent of the transactions. Analysts believe that foreign investors are benefiting from the Central Bank of Nigeria’s foreign exchange unification, strategically investing in fundamental stocks on the Exchange. Total transactions at the bourse decreased by 62.65 percent from N702.98 billion in July 2023 to N262.56 billion in August 2023. Comparatively, transactions increased by 111.79 percent from August 2022. Despite this, total domestic transactions decreased by 65.97 percent from July to August 2023.
Key Points:
- In August 2023, foreign investors traded N37.16 billion, while domestic investors traded N225.40 billion, out of the overall N262.56 billion.
- Year-to-date, both foreign and domestic investors traded N2.4 trillion in stocks, compared to N1.89 trillion in the same period in 2022.
- Over a 16-year period, domestic transactions decreased by 45.30 percent from N3.556 trillion in 2007 to N1.945 trillion in 2022. Foreign transactions also decreased by 38.47 percent from N616 billion to N379 billion over the same period.
- Total domestic transactions accounted for about 84 percent of the total transactions carried out in 2022, while foreign transactions accounted for about 16 percent of the total transactions in the same period.
- In the first 8 months of 2023, total domestic transactions stood at N2.194 trillion, and total foreign transactions stood at N222.78 billion.
Analysis: Foreign investors traded 14.15 percent of the overall value in the Nigerian stock market in August 2023, with domestic investors accounting for the majority. This dynamic is attributed to foreign investors capitalizing on the Central Bank of Nigeria’s foreign exchange unification, strategically investing in key stocks. While total transactions increased significantly from the previous year, there was a notable decrease from July 2023. This mixed performance suggests both positive signs of domestic inflow growth and optimism driven by reforms, as well as a significant decline in overall market transactions in August 2023 compared to the previous month.
