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Nigerian Bourse: Foreign Investors Outperform Local Investors by 2.0%

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On a monthly basis, The Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows. As at 31 July 2019, total transactions at the nation’s bourse decreased significantly by 61.82% from N297.25 billion (about $970.1 million) in June 2019 to N113.47 billion (about $370.4 million) in July 2019. The performance of the current month when compared to the performance in the same period (July 2018) of the prior year revealed that total transactions also decreased by 22.31%. In July 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 2.00% 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 2019) revealed that total domestic transactions decreased significantly by 72.22% from N200.51 billion in June to N55.69 billion in July 2019. Similarly, total foreign transactions also decreased by 40.27% from N96.74 billion (about $315.7 million) to N57.78 billion (about $188.6million) between June and July 2019.

Analysis Of Domestic Transactions

The value of domestic transactions executed by Institutional investors outperformed retail investors by 8.00% as illustrated in figure 4 below. A comparison of domestic transactions in the current and prior month (June 2019) revealed that retail transactions decreased by 83.59% from N155.12 billion in June 2019 to N25.44 billion in July 2019. However, the institutional composition of the domestic market reduced by 33.28% from N45.34 billion in June 2019 to N30.25 billion in July 2019.

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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 twelve (12) year period, domestic transactions decreased by 66.68% from N3.556t in 2007 to N1.185t in 2018 whilst foreign transactions increased by 97.88% from N616m to N1.219t over the same period. Total foreign transactions accounted for about 51% of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49% of the total transactions in the same period. The actual performance referenced 2019A (2019 Actual) shows that total foreign transactions carried out year till date (YTD) is about N530.56 billion whilst total domestic transactions YTD is about N670.42 billion.

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