Capital

NSE: Domestic Investors Outperform Foreign Investors by 30% in May 2019

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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 May 2019, total transactions at the nation’s bourse increased by 48.49% from N148.91 billion (about $485.9 million) 5 recorded in April 2019 to N221.13 billion (about $713.7 million) in May 2019. However, the performance of the current month when compared to the performance in the same period (May 2018) of the prior year revealed that total transactions reduced by 30.52%. In May 2019, the total value of transactions executed by domestic investors significantly outperformed transactions executed by foreign investors by 30.00% as shown in figure 1 below.

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A further analysis of the total transactions executed between the current and prior month (April 2019) revealed that total domestic transactions increased by 99.83% from N71.99 billion in April 2019 to N143.87 billion in May 2019. In contrast, total foreign transactions increased marginally by 0.43% from N76.92billion (about $251.0 million) to N77.25 billion (about $252.1 million) between April and May 2019.

Analysis of Domestic Transactions

The value of domestic transactions executed by institutional investors’ outperformed retail investors by 34.00% as illustrated in figure 4 below. A comparison of domestic transactions in the current and prior month (April 2019) revealed that retail transactions increased by 61.41% from N29.26 billion in April 2019 to N47.23 billion in May 2019. However, the institutional composition of the domestic market increased significantly by 126.14% from N42.73 billion in April 2019 to N96.64 billion in May 2019.

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The data in figure 7 below, highlights the performance of the market over the last decade. Foreign transactions which stood at N1.539t in 2014 declined to N1.219t in 2018. Over the twelve (12) year period, domestic transactions decreased by 66.68% from N3.556t in 2007 to N1.185t in 2018. 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 N376.05 billion whilst total domestic transactions YTD is about N414.25 billion

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