Domestic and Foreign Portfolio Participation in Equity Trading - May 2020

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Tuesday, June 23, 2020 / 12:47 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 May 2020, total transactions at the nation's bourse decreased by 7.40% from N128.67billion (about $332.22million) in April 2020 5 to N119.15billion (about $307.32million) in May 20206. The performance of the current month when compared to the performance in May 2019 (N221.13billion) revealed that total transactions decreased by 46.12%. In May 2020, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 40% as shown in figure 1 below.

 

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A further analysis of the total transactions executed between the current and prior month (April 2020) revealed that total domestic transactions increased by 11.15% from N75.49billion in April to N83.91 billion in May 2020.However, total foreign transactions decreased by 33.73% from N53.18 billion (about $137.37million) to N35.24 billion (about $90.89million) between April and May 2020.

 

Analysis Of Domestic Transactions

Figure 4 below shows that Retail investors marginally outperformed Institutional Investors by 0.56%. A comparison of domestic transactions in the current and prior month (April 2020) revealed that retail transactions increased by 4.38% from N40.42 billion in April 2020 to N42.19 billion in May 2020. Similarly, the institutional composition of the domestic market increased by 18.96% from N35.07 billion in April 2020 to N41.72 billion in May 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 N340.29 billion whilst total domestic transactions YTD is about N534.37 billion.

 

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