Domestic And Foreign Portfolio Participation In Equity Trading - August 2019

Wednesday, September 18, 2019 /12:05PM / Header and Content by The Nigerian Stock Exchange

 On a monthly basis, The Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows. As at 30 August 2019, total transactions at the nation's bourse increased by 7.51% from N113.47 billion (about $370.4 million) in July 2019 to N121.99 billion (about $398.0 million) in August 2019. The performance of the current month when compared to the performance in the same period (August 2018) of the prior year revealed that total transactions decreased by 8.85%. In August 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 4.00% as shown in figure 1 below.

A further analysis of the total transactions executed between the current and prior month (July 2019) revealed that total domestic transactions increased by 5.39% from N55.69 billion in July to N58.69 billion in August 2019. Similarly, total foreign transactions also increased by 10.59% from N57.78 billion (about $188.6 million) to N63.90 billion (about $208.4million) between July and August 2019.

Analysis of Domestic Transactions

The value of domestic transactions executed by Institutional investors outperformed retail investors by 8.00% as illustrated in figure 4 below. A comparison of domestic transactions in the current and prior month (July 2019) revealed that retail transactions decreased by 5.97% from N25.44 billion in July 2019 to N23.92 billion in August 2019. However, the institutional composition of the domestic market increased by 12.95% from N30.25 billion in July 2019 to N34.17 billion in August 2019.

Historical Analysis of Domestic and Foreign Transactions

The data in figure 7 below, highlights the performance of the market over the last decade. Over a twelve (12) year period, domestic transactions decreased by 66.68% from N3.556t in 2007 to N1.185t in 2018 whilst foreign transactions increased by 97.88% from N616m to N1.219t over the same period.

Total foreign transactions accounted for about 51% of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49% of the total transactions in the same period.

The actual performance referenced 2019A (2019 Actual) shows that total foreign transactions carried out year till date (YTD) is about N594.46 billion whilst total domestic transactions YTD is about N728.51 billion.

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