Domestic and Foreign Portfolio Participation in Equity Trading - August 2020

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Thursday, September 24, 2020 / 6:27 PM / By NSE / Header Image Credit: NSE


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On a monthly basis, The Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows. As at 31 August 2020, total transactions at the nation's bourse decreased by 8.49% from N103.21billion (about $265.55million) in July 2020 5 to N94.45billion (about $244.27million) in August 20206. The performance of the current month when compared to the performance in August 2019 (N121.99billion) revealed that total transactions decreased by 22.58%. In August 2020, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 18% as shown in figure 1 below.

 

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A further analysis of the total transactions executed between the current and prior month (July 2020) revealed that total domestic transactions decreased by 19.16% from N68.62billion in July to N55.47billion in August 2020. However, total foreign transactions increased by 12.69% from N34.59billion (about $89.00million) to N38.98billion (about $100.81million) between July and August 2020.

 

Analysis Of Domestic Transactions

Figure 4 below shows that Institutional Investors outperformed Retail Investors by 4%. A comparison of domestic transactions in the current and prior month (July 2020) revealed that retail transactions decreased by 18.22% from N32.54billion in July 2020 to N26.61billion in August 2020. Whilst the institutional composition of the domestic market decreased by 20.01% from N36.08billion in July 2020 to N28.86billion in August 2020.

 

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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 thirteen (13) year period, domestic transactions decreased by 72.30% from N3.556t in 2007 to N985bn in 2019 whilst foreign transactions increased by 53.08% from N616bn to N943bn over the same period.

 

Total domestic transactions accounted for about 51% of the total transactions carried out in 2019, whilst foreign transactions accounted for about 49% of the total transactions in the same period.

 

The actual performance referenced 2020A (2020 Actual) shows that total foreign transactions carried out year till date (YTD) is about N470.20billion whilst total domestic transactions YTD is about N731.00billion.

 

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