Domestic and Foreign Portfolio Participation in Equity Trading - July 2021

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Monday, August 23, 2021 / 03:04 PM / By NGX / Header Image Credit: NGX

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On a monthly basis, Nigerian Exchange Limited ("NGX") polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows. As at 31 July 2021, total transactions at the nation's bourse decreased by 10.92% from N100.77billion (about $244.88million) in June 20215 to N89.77billion (about $218.20million) in July 20216. The performance of the current month when compared to the performance in July 2020 (N103.21billion) revealed that total transactions decreased by 13.02%. In July 2021, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 66% as shown in figure 1 below.

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A further analysis of the total transactions executed between the current and prior month (June 2021) revealed that total domestic transactions decreased by 4.02% from N77.35billion in June to N74.24billion in July 2021. Total foreign transactions also decreased by 33.69% from N23.42billion (about $56.91million) to N15.53billion (about $37.75million) between June 2021 and July 2021.

 

Analysis of Domestic Transactions

Figure 4 below shows that Retail Investors outperformed Institutional Investors by 2%. A comparison of domestic transactions in the current and prior month (June 2021) revealed that retail transactions increased by 4.24% from N36.06billion in June 2021 to N37.59billion in July 2021. However, the institutional composition of the domestic market decreased by 11.24% from N41.29billion in June 2021 to N36.65billion in July 2021.

 

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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 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 are circa N237.49billion, whilst total domestic transactions are circa N886.70billion.

 

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