Domestic and Foreign Portfolio Participation in Equity Trading - June 2019

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Wednesday, July 24, 2019 /10:10AM / 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 30 June 2019, total transactions at the nation’s bourse increased by 34.42% from N221.13 billion (about $713.7 million) in May 2019 to N297.25 billion (about $970.1 million) in June 2019.  The performance of the current month when compared to the performance in the same period (June 2018) of the prior year revealed that total transactions also increased by 58.29%. In June 2019, the total value of transactions executed by domestic investors significantly outperformed transactions executed by foreign investors by 34.00% as shown in figure 1 below.


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A further analysis of the total transactions executed between the current and prior month (May 2019) revealed that total domestic transactions increased by 39.36% from N143.87 billion in May to N200.51 billion in June 2019. In contrast, total foreign transactions also increased by 25.22% from N77.25 billion (about $252.1 million) to N96.74 billion (about $315.7million) between May and June 2019.#


Analysis of Domestic Transactions

The value of domestic transactions executed by retail investors significantly outperformed institutional investors by 54.00% as illustrated in figure 4 below. A comparison of domestic transactions in the current and prior month (May 2019) revealed that retail transactions increased by 228.43% from N47.23 billion in May 2019 to N155.12 billion in June 2019. However, the institutional composition of the domestic market reduced significantly by 53.04% from N96.64 billion in May 2019 to N45.38 billion in June 2019.  


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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 N472.78 billion whilst total domestic transactions YTD is about N614.67 billion.


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