Domestic and Foreign Portfolio Participation in Equity Trading – July 2014

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September 3rd, 2014 4.25PM/NSE

On a monthly basis, The Nigerian Stock Exchange polls trading figures from major custodians and market operators on their foreign portfolio investments (FPI). The table below shows an analysis of transactions on The Exchange at the end of July 2014.

 

Table 1: Analysis of Transactions for the Period Ended 31 July 2014


Note the significant increase in the domestic transactions from 47.68% in June to 74.83% in July. On the contrary, foreign transactions decreased from 52.32% to 25.17% in the same period.

 
Analysis

Domestic vs. Foreign 2014

Domestic participation at the nation’s bourse increased to N167.77 billion (about $1.08 billion) in July 2014, up 81.77% from January 2014. Foreign Portfolio Investors (FPI) ceded about 49.66% of trading to domestic investors as foreign transactions decreased significantly from 49.28% to 25.17% over the same period.

Total transactions increased by 23.20% from N181.97 billion in January to N224.19 billion in July and foreign portfolio investors’ inflows accounted for 14.58% of total transactions while the outflows accounted for 10.59% of the total transactions in July 2014.

In comparison to the same period in 2013, total FPI decreased by 39.79%, whilst the total domestic transactions increased by 198.79%. FPI inflows outpaced outflows which were the opposite when compared to the same period in 2013. Overall, there was a 49.60% increase in total transactions in comparison to the same period in 2013.

Methodology - The FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (Equities only).

The January to June 2014 and July 2013 transactions are included for comparison to the July 2014 transactions.





Note the significant shift in FPI which outperformed domestic between 2011 and 2012. However in 2013, there was a major rebound in the domestic component which led to an almost equal split in foreign vs. domestic transactions.



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