Domestic and Foreign Portfolio Participation in Equity Trading – October 2014

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November 19th, 2014 1.20 PM / 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 October 2014.

 

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


Note the significant increase in FPI transactions from 43.36% in September to 87.54% in October. On the contrary, domestic transactions decreased from 56.64% to 12.46% in the same period.

 

Analysis 

Domestic vs. Foreign 2014

FPI transactions at the nation’s bourse which recorded its highest flows for the year in September decreased to N153.28 billion (about $0.99 billion) in October 2014, down 32.38% from September 2014. In comparison to FPI transactions, domestic transactions decreased from 56.64% to 12.46% whilst FPI transactions increased significantly from 43.36% to 87.54% over the same period.

 

Total transactions decreased by 3.78% from N181.97 billion in January to N175.10 billion in October and foreign portfolio investors’ inflows accounted for 29.73% of total transactions while the outflows accounted for 57.81% of the total transactions in October 2014.

 

In comparison to the same period in 2013, total FPI increased by 86.18%, whilst the total domestic transactions decreased by 62.89%. However, the FPI outflows outpaced inflows by 94.4%, a sharp increase compared to the same period in 2013. Overall, there was a 24.07% increase in total transactions in comparison to the same period in 2013.

 

1. 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).

2. The January to September 2014 and October 2013 transactions are included for comparison to the October 2014 transactions. 



Retail vs. Institutional Jan - Oct 2014



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

 

Historical Trends – Foreign vs. Domestic


Information on the retail and institutional components of the total domestic transactions in October is based on data obtained from about 95% of Active Dealing Members of The Exchange.

 

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