Buoyed by the euphoria and the raft of changes in government policies, total foreign transactions performed by investors on the Nigerian Exchange Limited (NGX) improved to N145.08bn in the first six months of 2023, according to the recently released data on domestic and foreign portfolio investment report in the nation’s equity trading for the month of June 2023.
It will be recalled that the total foreign transactions in the first four months of 2023, stood at N62.18bn owing to the soaring inflation, prolonged FX scarcity as well as uncertainties in the build up to the 2023 general elections.
However, the report – prepared on a monthly basis by NGX Regulation Limited, with trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows, revealed that total domestic transactions on the Exchange stood at N1.306tr, of which total foreign transactions stood at N145.08bn.
The report also revealed that total transactions at the nation’s bourse increased by 25.96% from N322.92bn (about $693.99 million) recorded in May 2023 to N406.75bn (about $537.87m) in June 2023.
The performance of the current month when compared to the performance in June 2022 (N156.52bn) revealed that total transactions increased by 159.87%.
Furthermore, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 78%, just as domestic inflows and outflows stood at N180.91bn and N180.11bn while foreign inflows and outflows stood at N22.72bn and N23.02bn.
A further analysis of the total transactions executed between the current and prior month (May 2023) revealed that total domestic transactions increased by 26.34% from N285.76bn in May to N361.01bn in June 2023. Similarly, total foreign transactions increased significantly by 23.09 per cent from N37.16bn (about $79.88m) to N45.74bn (about $60.49m) between May 2023 and June 2023.
The report also revealed that institutional investors outperformed retail investors by 32% whilst a comparison of domestic transactions in the current and prior month (May 2023) revealed that retail transactions increased by 40.7% from N88.5bn in May to N124.52bn in June 2023. Similarly, the institutional composition of the domestic market increased marginally by 19.89% from N197.26 billion in May 2023 to N236.49bn in June 2023.
Over a 16-year period, domestic transactions decreased by 45.3% from N3.556tr in 2007 to N1.945tr in 2022 whilst foreign transactions also decreased by 38.47% from N616bn to N379bn over the same period. Total domestic transactions accounted for about 84% of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16% of the total transactions in the same period.