Stepping on toes

Domestic investors account for 89.87% of Nigeria’s Q1 equities transactions

Domestic investors in Nigeria’s equities market accounted for 89.87percent of total transactions in first-quarter (Q1) to March 31, 2023.

According to the recently released data on domestic and foreign portfolio participation in Nigeria’s equity trading, out of the N530.23billion worth of equities traded in Q1’2023, foreign investors accounted for N53.71billion or 10.13percent, while domestic investors controlled larger chunk of transactions worth N476.52billion, representing 89.87percent of total transactions in the review first quarter.

Total domestic transactions accounted for about 84percent of the total transactions carried out in 2022, while foreign transactions accounted for about 16percent of the total transactions in the same year 2022. In the first-quarter, foreign inflow in the market was valued at N18.12billion, while foreign outflow was worth N35.59billion.

Read also: Nigeria’s economy need substantial expenditure to grow fast, tackle debt – Kale

The value of transactions by domestic retail investors was N123.28billion while transactions by domestic institutional investors in Q1 worth N353.24billion. On a monthly basis, Nigerian Exchange Limited (NGX) polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

As at March 31, 2023, total transactions at the nation’s bourse decreased by 22.60percent from N188.91billion (about $409.72million) in February 2023 to N146.22billion (about $317.09million) in March 2023.

The performance of the review month of March when compared to the performance in March 2022 (N185.26billion) revealed that total transactions decreased by 21.07percent. In March 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by foreign investors by circa 88percent.

A further analysis of the total transactions executed between the month of March and prior month (February 2023) revealed that total domestic transactions decreased by 19.06percent from N169.29billion in February to N137.03billion in March 2023. Similarly, total foreign transactions decreased more significantly by 53.16percent from N19.62billion (about $42.51million) to N9.19billion (about $19.94million) between February 2023 and March 2023. Institutional investors outperformed Retail investors by 22percent.

A comparison of domestic transactions in the current and prior month (February 2023) revealed that retail transactions increased by 51.85percent from N34.79billion in February to N52.83billion in March 2023. However, the institutional composition of the domestic market decreased significantly by 37.40percent from N134.50billion in February 2023 to N84.20billion in March 2023.