Uncertainty, inflation weaken foreigners appetite for stocks

As domestic investors lead trading by 76% in May

Uncertainty, inflation and other macro economic challenges bedeviling the country have continued to weaken foreign investors’ appetite for stocks, as latest report by the Nigerian Exchange Limited (NGX) shows that the total value of transactions executed by domestic investors outperformed those of foreigners by 76 per cent.

Specifically, the Domestic and Foreign Portfolio Investment report released by the NGX for May showed that total domestic transactions hit N285.8 billion in May 2023 while total foreign transactions stood a N37.16 billion

Also, total domestic transactions accounted for about 84 per cent of the total transactions carried out 16 per cent of the total transactions in the same period. The transaction data showed that total domestic transactions stood at N945 billion, whilst total foreign transactions condtituted N99.3 billion.

The performance of the market over the last 16 years showed that domestic transactions decreased by 45.30 percent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 per cent from N616 billion to N379 billion over the same period.

Further breakdown of the report indicated that domestic transactions decreased by 45.30 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 while foreign transactions also decreased by 38.5 from N616 billion to N379 billion over the same period.

Institutional Investors also outperformed retail Investors by 38 per cent. A comparison of domestic transactions in the current and prior month (April 2023) revealed that retail transactions increased by 19.29 per cent from N74.19 billion in April to N88.50billion in May 2023.

As at May 2023, total transactions at the nation’s bourse increased by 68.88% from N191.21billion (about $413.25million) in April5 2023 to N322.92billion
(about $693.99million) in May6 2023.

The performance of the current month when compared to the performance in May 2022 (N607.45billion) revealed that total transactions decreased by 46.8 per cent.