Based on the data released by the NSE on Domestic & Foreign Portfolio Investments for January 2021, total value fell 13.7% m/m to N232.5bn (US$590.8m) from N269.2bn (US$687.1m) in December 2020. Furthermore, total value declined 1.27% y/y to N232.5bn (US$590.8m) in January 2021 from N235.5bn (US$600.8M) in January 2020. Activity level among domestic investors decreased 7.2% m/m to N184.9bn (US$470.0m) while foreign investor transactions also took a dip, down 32.0% m/m to N47.52bn (US$120.78m). Domestic investors still retained dominance of trading activities on the local bourse as their share of total transactions in January stood at 79.6%.
On the domestic front, transactions were dominated by institutional investors who traded N117.5bn (US$298.6m) while retail investors executed transactions worth N67.4bn (US$171.4m). Notably, the volume of transactions declined 14.9% m/m at the institutional level contrary to an increase of 10.16% m/m at the retail level. For foreign investors, outflows fell to N30.8bn (US$78.3m) compared with N48.8bn (US$124.5m) in December. In the same vein, foreign inflows decreased to N16.7bn (US$42.5m) in January from N21.1bn (US$53.9m) in December, resulting in a net outflow of N14.1bn (US35.7m) compared with a net outflow of N27.6 (US$70.5m) in December.
Looking ahead, for as long as yields in the fixed income space continue to rise, the equities market will continue to take a hit in our view. In the near term, we believe good corporate earnings and dividend announcements will support some stocks in the equities market. We, however, expect FPIs to retain apathy towards the Nigerian market in the short term, though the inability to source FX for repatriation may continue to force reinvestments.