Domestic and Foreign Portfolio Participation in Equity Trading - January 2021

Monday, March 01, 2021 / 3:30 PM / By NSE / Header Image Credit: NSE

On a monthly basis, The Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)2 flows. As at 31 January 2021, total transactions at the nation's bourse decreased by 13.66% from N269.24billion (about $687.06million) in December 20203 to N232.46billion (about $590.82million) in January 20214 .

The performance of the current month when compared to the performance in January 2020 (N235.46billion) revealed that total transactions decreased marginally by 1.27%. In January 2021, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 60% as shown in figure 1 below.

A further analysis of the total transactions executed between the current and prior month (December 2020) revealed that total domestic transactions decreased by 7.21% from N199.32billion in December to N184.94billion in January 2021. Additionally, total foreign transactions decreased by 32.04% from N69.92billion (about $178.44million) to N47.52billion (about $120.78million) between December 2020 and January 2021.

Analysis of Domestic Transactions

Figure 4 below shows that Institutional Investors outperformed Retail Investors by 28%. A comparison of domestic transactions in the current and prior month (December 2020) revealed that retail transactions increased by 10.16% from N61.22billion in December 2020 to N67.44billion in January 2021. The institutional composition of the domestic market also decreased by 14.91% from N138.09billion in December 2020 to N117.50billion in January 2021.

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 fourteen (14) year period, domestic transactions decreased by 59.54% from N3.556t in 2007 to N1.439t in 2020 whilst foreign transactions increased by 18.45% from N616bn to N729bn over the same period.

Total domestic transactions accounted for about 74% of the total transactions carried out in 2020, whilst foreign transactions accounted for about 26% of the total transactions in the same period.

The transaction data for 2021 shows that total foreign transactions was circa N47.52billion, whilst total domestic transactions was circa N184.94billion. 

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