Domestic transactions account for 77% of overall activities in 2021

Total domestic transactions on the Nigerian Exchange Limited (NGX) accounted for about 77 per cent of the total transactions carried out in 2021.

According to the Domestic and Foreign Portfolio Investment (FPI) July 2022 report which captured these transactions, as well as trading figures from market operators, while domestic transactions stood at 77 per cent, foreign transactions accounted for about 23 per cent of the total transactions during the same period.

The exchange explained that the total domestic investor transactions (TDIT) on the bourse also grew by N1.49 trillion as against N273.16 billion recorded by foreign investors in the first seven months of 2022.

Furthermore, it noted that while domestic transactions stood at N1.465 trillion in the first seven months of 2021, foreign transactions stood at N435 billion in the same period.

According to NGX, this meant that total domestic transactions on the NGX grew by 1.7 per cent while foreign transactions dropped by 37.24 per cent.

“Although the July report revealed that total transactions at the nation’s bourse decreased by 35.36 per cent from N156.52 billion (about $371.53million) in June 2022 to N101.18 billion (about $236.86 million) in July 2022, the performance of the current month, however, when compared to the performance in July 2021 (N89.77 billion), total transactions increased by 12.71 per cent,” it stated

Also, the exchange said the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 42 per cent while domestic inflows and outflows stood at N36.97 billion and N34.53 billion respectively, in July.

On the flip side, the exchange pointed out that foreign inflows recorded N13.68 billion while foreign outflows stood at N16 billion. It attributed the decline to the scarcity of Foreign Exchange (FX) currently bedevilling the nation’s economy.

“Since the outbreak of COVID-19, inflows across capital importation, loans, diaspora remittances, exports, incomes from investments and other autonomous sources have been dwindling.

“However, domestic investors have continued to hold their ground on the floor of the NGX despite rising inflation and currency volatility in the foreign exchange market, which remained key drivers of the domestic and foreign portfolio investment.”

In addition, domestic transactions had decreased by 58.80 per cent over 15 years, from N3.556 trillion in 2007 to N1.465 trillion in 2021 whilst foreign transactions also decreased by 29.38 per cent from N616 billion to N435 billion over the same period.

The exchange last week, announced that bond issuances in the first half (H1) of 2022 on Nigerian Exchange Limited (NGX) grew to over N2.5 trillion.

This is despite uncertainty surrounding access to fresh capital for expansion; as well as infrastructural projects. Also, the Eurobonds listings on NGX grew to $4 billion, while equity listings rose by N1.08 trillion despite the weak macroeconomic environment.

Analysing the exchange’s listing H1 ’22 report (January – June), the Federal Government dominated issuances, while corporate organisations made significant inroads during the period.