The latest report by the Nigerian Exchange Limited (NGX) revealed that the total value of transactions executed by domestic investors outperformed those of foreigners with an 88 percent share of the turnover, indicating that macroeconomic challenges have continued to negatively affect foreign investors’ appetite for equities.
The total domestic transactions in July reached N662.4 billion, up 83.5% from the N361 billion registered in June 2023, according to the Domestic and Foreign Portfolio Investment report issued by the NGX.
However, overall foreign transactions somewhat declined from N45.74 billion (or $60.49 million) to N40.54 billion (or $52.58 million), a fall of 11.4%.
The market’s performance during the previous 16 years also revealed a decline in domestic transactions of 45.3% from N3.556 trillion in 2007 to N1.945 trillion in 2022, as well as a decrease in international transactions of 38.5% from N616 billion to N379 billion during the same time frame.
A total of 84 percent of all transactions in 2022 were domestic, while 16 percent of all transactions during that time period were foreign. Domestic transactions likewise made up roughly 84 percent of all transactions in 2022.
Total transactions at the national stock exchange surged by 72.8% between June 2023 and July 2023, from N406.8 billion (or $537.87 million) to N702.9 billion (or $911.91 million).
Additionally, the performance of this month compared to July 2022’s performance (N101.18 billion) showed a 594.8% rise in total transactions.
The total transactions carried out between July and the preceding month (June), according to the data, showed that retail transactions surged by 84.7% from N124.5 billion in June to N229.9 billion in July 2023.
Similarly, from N236.5 billion in June 2023 to N432.5 billion in July 2023, the institutional composition of the domestic market expanded by 82.9%.
The transaction statistics also revealed that institutional investors beat individual investors by 30%, with total domestic transactions estimated to be about N1.968 trillion and total international transactions estimated to be around N185.6 billion.
According to the NGX foreign portfolio report, which displays the inflows and outflows of foreign investments as well as the percentage of both foreign investment and domestic investment for each month, anxiety about investments has become apparent in the equities space, according to vice president of Highcap Securities Limited David Adonri.
He claimed that despite recent macroeconomic reforms, domestic investors flooded the stock market while international investors were still suffering from the pain of unremitted dividends and earnings.
He continued by saying that the adverse effects of reforms on corporate fundamentals might prevent domestic investors’ enthusiasm from continuing in August.
Amaechi Egbo, an independent investor, asked the new administration to address the country’s macroeconomic problems that are preventing investment in order to draw in more foreign investors and issuers and expand the market.
