Domestic investors lead stock activities by 88% in July

.Local transaction rises by 83.5 per cent month-on-month
Macroeconomic challenges have continued to impact negatively on foreign investors’ appetite for equities as the latest report by the Nigerian Exchange Limited (NGX) showed that the total value of transactions executed by domestic investors outperformed those of foreigners with an 88 per cent share of the turnover.

Specifically, the Domestic and Foreign Portfolio Investment report released by the NGX for July showed that total domestic transactions hit N662.4 billion, representing an 83.5 per cent rise when compared to N361 billion recorded in June 2023.

However, total foreign transactions decreased marginally by 11.4 per cent from N45.74 billion (about $60.49 million) to N40.54 billion (about $52.58 million).

Also, the performance of the market over the last 16 years showed that domestic transactions decreased by 45.3 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.5 per cent from N616 billion to N379 billion over the same period.

Total domestic transactions also accounted for about 84 per cent of the total transactions carried out in 2022 about 84 per cent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 per cent of the total transactions in the same period.

As at 28 July 2023, total transactions at the nation’s bourse increased by 72.8 per cent from N406.8 billion (about $537.87million) in June 2023 to N702.9 billion (about $911.91million) in July 2023.

Also, the performance of the current month when compared to the performance in July 2022 (N101.18 billion) revealed that total transactions increased by 594.8 per cent.

According to the report, the total transactions executed between July and prior month (June) revealed that retail transactions increased by 84.7 per cent from N124.5 billion in June to N229.9 billion in July 2023.

Similarly, the institutional composition of the domestic market increased by 82.9 per cent from N236.5 billion in June 2023 to N432.5 billion in July 2023.
Additionally, the transaction data showed that total domestic transactions are circa N1.968 trillion, whilst total foreign transactions are circa N185.6 billion while Institutional investors outperformed retail investors by 30 per cent.

Vice President of Highcap Securities Limited, David Adonri, said anxiety around investments had become visible in the equities space, going by the NGX foreign portfolio report, which shows the inflows and outflows of foreign investments as well as the percentage of both foreign investment and domestic investment for each month.

According to him, domestic investors flooded the equities market after recent macroeconomic reforms while foreigners were still reeling under the pain of unremitted dividends and profits.

He added that the exuberance by domestic investors may not be sustained in August due to the negative impact of reforms on corporate fundamentals.

An independent investor, Amaechi Egbo, urged the new government to tackle prevailing macroeconomic issues impeding investment in the country to attract more foreigners and issuers and grow the market.