Foreign Investments On The NSE (NGX) Falls To 14.6% In First Half Of 2022

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Foreign Investments On The NSE (NGX) Falls To 14.6% In First Half Of 2022

The entire value of domestic transactions carried out by domestic investors during the period under consideration was N1.419 trillion, compared to N243 billion for all transactions carried out by international investors.

The percentage of exchange transactions involving foreign investments that totaled N1.66 trillion in the first half of the year declined to 14.6%.

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It reflects the lowest level of annualized foreign investor engagement on the market in the previous 15 years.

The entire amount of local transactions on the Nigerian Stock Exchange surpassed transactions made by foreign investors by N1.176 trillion, or 483.9 percent, according to a preliminary study of the NGX report of transactions on the exchange.

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Foreign Investments On The NSE Falls To 14.6% In First Half Of 2022

Total transactions at the country’s stock exchange dropped to N156.52 billion (or $371.53 million) on June 30th, 2022, from N607.45 billion (or $1.45 billion) in May 2022.

Total transactions grew by 55.32 percent in the current month compared to June 2021 (N100.77 billion), according to performance data. The total value of transactions carried out by domestic investors in June 2022 was 46% more than that of transactions carried out by foreign investors.

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Foreign Investments On The Nigerian Stock Exchange Falls To 14.6% In First Half Of 2022

FURTHER ANALYSIS

Further analysis of the total transactions executed between the current and prior month (May 2022) revealed that total domestic transactions decreased significantly by 72.16% from N562.15billion in May to N114.33billion in June 2022.
Similarly, total foreign transactions decreased by 6.87% from N45.30billion (about $108.02million) to N42.19billion (about $100.15million) between May 2022 and June 2022.
Retail Investors underperformed Institutional Investors by 22%. Retail transactions declined by 40.54 percent from N74.19 billion in May 2022 to N44.11 billion in June 2022, according to a comparison of domestic transactions in the current and previous month (May 2022). The institutional share of the domestic market also fell, from N487.96 billion in May 2022 to N70.22 billion in June 2022, a decline of 85.61 percent.

KEY HIGHLIGHTS OF ITS PERFORMANCE (1 DECADE)

Highlights of the performance of the market over the last decade revealed that over a fifteen (15) year period, domestic transactions decreased by 58.80% from N3.556trillion in 2007 to N1.465 trillion in 2021 whilst foreign transactions also decreased by 29.38% from N616billion to N435 billion over the same period.
Total domestic transactions accounted for about 77% of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23% of the total transactions in the same period.

What you should know

The listing of BUA Foods on the NGX, investors’ response to companies’ full-year earnings and dividend announcements, the dominance of domestic players over foreign players in the market, and low yields in the fixed income market forced investors to consider more profitable securities in the equity market were all factors that helped the stock market regain its confidence at the beginning of the year.
According to capital market professionals, local investors are increasing their stakes by benefiting from the absurdly low stock prices in NGX. They argued that the market’s favorable dividend yield and the low yield environment in the fixed income market are driving local investors to increase their holdings in the equity market.
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.
On a monthly basis, Nigerian Exchange Limited (NGX) polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows.
The Domestic and Foreign Portfolio Investment Report is prepared on a monthly basis 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. The Domestic investors are further categorized into Retail and Institutional investors.

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