Foreign participation in the Nigerian Exchange Limited (NGX) fell to 8.5% in January 2024 as domestic investors continued to dominate transactions in the nation’s stock market.
Foreign investors related transactions were N53.1 billion, higher than the N24.9 billion in recorded same period in 2023. However, in terms of percentage contribution to total transactions, January 2023 was 12.76%.
This is the lowest level on record for foreign participation when compared to domestic participation.
The figures were sourced from the domestic and foreign investment report released by the Nigerian Exchange Limited.
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The total value of domestic transactions during this period amounted to N598.41 billion, contrasting starkly with the N53.11 billion recorded for foreign transactions.
A detailed examination reveals that domestic transactions surpassed those executed by foreign investors by a substantial margin of N545.3 billion, representing a wide margin of 1026.74% difference.
This notable variance underscores prevailing sentiments, particularly among foreign investors, who have exhibited cautious behaviour in light of the persistent volatility in the Nigerian market.
Uncertainties within the economy have led many foreign investors to adopt a cautious approach, with a significant number choosing to minimize their market exposure by remaining on the sidelines.
The prevailing economic uncertainties have contributed to the subdued participation of foreign investors, who are exercising prudence amid market volatility.
As a result, the dominance of domestic transactions underscores the resilience and confidence of local investors in navigating the prevailing market conditions.
January transactions
As of 31 January 2024, total transactions at the nation’s bourse increased by 89.45% from N343.90 billion (about $382.59 million) in December 3 2023 to N651.52 billion (about $479.99 million) in January 2024.
- The performance of the current month when compared to the performance in January 2023 (N195.10 billion) revealed that total transactions increased significantly by 233.94%.
- In January 2024, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 84%.
- A further analysis of the total transactions executed between the current and prior month (December 2023) revealed that total domestic transactions increased by 102.15% from N296.03 billion in December to N598.41 billion in January 2024.
- Total foreign transactions also increased by 10.95% from N47.87 billion (about $ 53.26 million) to N53.11 billion (about $39.13 million) between December 2023 and January 2024.
Institutional and retail investors
According to the report, Institutional Investors outperformed Retail Investors by 4%.
A comparison of domestic transactions in the current and prior month (December 2023) revealed that retail transactions increased by 211.73% from N91.61 billion in December to N285.58 billion in January 2024.
Similarly, the institutional composition of the domestic market increased by 53.03% from N204.42 billion in December 2023 to N312.83 billion in January 2024.
Performance in a decade
Highlights of the performance of the market over the last decade showed that over a sixteen (16) year period, domestic transactions decreased by 10.94% from N3.556 trillion in 2007 to N3.167 trillion in 2023 whilst foreign transactions also decreased by 33.28% from N616 billion to N411 billion over the same period.
Total domestic transactions accounted for about 89% of the total transactions carried out in 2023, whilst foreign transactions accounted for about 11% of the total transactions in the same period.
What you should know
The Domestic and Foreign Portfolio Investment Report is prepared monthly by NGX Regulation Limited, 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. Domestic investors are further categorized into Retail and Institutional investors.
