Domestic and Foreign Portfolio Participation in Equity Trading - December 2013

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February 10, 2014 4.50PM/ 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 between January and December 2013.

 

Table 1: Monthly Analysis of Transactions for the Period Ended 31 December 2013



Analysis

 

Domestic vs. Foreign 2013

The table above illustrates that FPI transactions which started at 36.89% at the beginning of the year increased to 48.91% at the end of December, 2013 whilst domestic transactions decreased from 63.11% to 51.09% over the same period.

Total foreign transactions increased by 28.90% from N808.4b in 2012 to N1,042.04b in 2013. On the other hand, total domestic transactions increased more significantly by 98.42% from N508.6b in 2012 to N1,009.16b in 2013. This indicates a stronger participation of domestic investors in the period under review.





The graph in Fig 3 highlights the domestic composition of transactions on The Exchange between June and December, 2013. It illustrates that the institutional composition of the domestic market which was about 66.70% at the end of June decreased to 46.66% at the end of December 2013 whilst the retail composition increased significantly from 33.30% to 53.34% in the same period.

 

Historical Trends – Foreign vs. Domestic



Total FPI transactions, which accounted for 14.8% of total transactions in 2007 consistently increased over the years to 50.8% in 2013 (An increase of 36% over the 6 year period).

 

Domestic transactions on the other hand started at 85.2% in 2007 but reduced significantly to 49.2% of total transactions in 2013 (A sharp decline of 36% in the 6 year period).

 

Note: Information on the retail and institutional components of the total domestic transactions in December is based on data obtained from about 92% of Active Dealing Members of The Exchange.


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