Amid the bounce of a new administration and raft of changes in government policies, total foreign transactions performed by investors at the floor of the Nigerian Exchange Limited (NGX) grew to N145.08 billion in the first six months (H1) of 2023. This is according to the recently released data on domestic and foreign portfolio investment report in Nigeria’s equity trading for the month of June 2023.
It will be recalled that the total foreign transactions in the first four months of 2023, stood at N62.18 billion owing to the soaring inflation, prolonged FX scarcity as well as uncertainties building up to the 2023 elections.
However, the report, prepared on a monthly basis by NGX Regulation Limited,with trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows, revealed that total domestic transactions on the Exchange stood at N1.306 trillion whilst total foreign transactions stood at N145.08 billion at the end of the period under review.
The report also revealed that total transactions at the nation’s bourse increased by 25.96 per cent from N322.92 billion (about $693.99 million) recorded in May 2023 to N406.75 billion (about $537.87 million) in June 2023. The performance of the current month when compared to the performance in June 2022 (N156.52 billion) revealed that total transactions increased by 159.87 per cent.
Furthermore, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 78 per cent. Domestic inflows and outflows stood at N180.91 billion and N180.11 billion while foreign inflows and outflows stood at N22.72 billion and N23.02 billion.
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A further analysis of the total transactions executed between the current and prior month (May 2023) revealed that total domestic transactions increased by 26.34 per cent from N285.76 billion in May to N361.01 billion in June 2023. Similarly, total foreign transactions increased significantly by 23.09 per cent from N37.16 billion (about $79.88 million) to N45.74 billion (about $60.49 million) between May 2023 and June 2023. The report also revealed that institutional investors outperformed retail investors by 32 per cent whilst a comparison of domestic transactions in the current and prior month (May 2023) revealed that retail transactions increased by 40.70 per cent from N88.50 billion in May to N124.52 billion in June 2023. Similarly, the institutional composition of the domestic market increased marginally by 19.89 per cent from N197.26 billion in May 2023 to N236.49 billion in June 2023. Over a 16-year period, domestic transactions decreased by 45.30 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 per cent from N616 billion to N379 billion over the same period.
Total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 per cent of the total transactions in the same period.
