Foreign Portfolio Investors equity trading drops 30% in 12-month:By Sam Atanbiyi|
Recent data from the stock market has shown that foreign investors dominate chunk of transactions conducted on the floor of the Nigerian Stock Exchange in September. Though their participation in equity trading has dropped more than 30% in the last one year.
Total foreign transactions pitched at N688.91 billion in September 2019 as against N991.19 billion in September 2018.
In the last three months however, foreign participants in equity trading have increased their activities consistently.
Market data shows that total transaction of N1.464 trillion was conducted on the bourse by the end of September 2019; from January to September 2019.
This happens to be 27% below total transaction of N2.007 trillion conducted in the comparable period in 2018.
Meanwhile, of N141.45 billion transactions conducted September 2019; foreign participation accounted for 66.77% as against domestic deals 33.23%.
Data also shows that foreign inflow dropped by about 32% from N477.68 billion to N326 billion in September 2019.
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On the outflow side, in September 2019 total sum of N46.72 billion has gone from the market compare to N47.73 billion inflow recorded. But compare to last year, 2019 has recorded lower outflow.
For September, data shows that total transactions at the nation’s bourse increased by 15.95% from N121.99 billion which is about $398.0 million in August 2019 to N141.45 billion or about $461.50 million.
However, in the last three months, foreign investors have been more active than domestic participants in equity trading.
In July, of the sum of N113.47 billion transactions conducted on the bourse, foreign investors accounted for 50.92% as against local investors 49.08%.
Similar pattern occurred in August when foreign investors pull weight on the market. They accounted for 52.38% of N121.99 billion total market transactions in August.
The performance of the month of September 2019 when compared to the performance in the comparable period in September 2018 revealed that total transactions increased by 8.64%.
Meanwhile, total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 34%.
A further analysis of the total transactions executed between September and August 2019 revealed that total domestic transactions decreased by 19.91% from N58.69 billion in August to N47.00 billion in September 2019.
However, total foreign transactions increased by 47.81% from N63.90 billion which was about $208.4 million to N94.45 billion or about $308.2million between August and September 2019.
The value of domestic transactions executed by institutional investors and retail investors were at par.
A comparison of domestic transactions in the month compare to August 2019 revealed that retail transactions decreased by 2.34% from N23.92 billion in August 2019 to N23.36 billion in September 2019.
However, the institutional composition of the domestic market declined more significantly by 30.81% from N34.17 billion in August 2019 to N23.64 billion in September 2019.
Over a twelve (12) year period, domestic transactions decreased by 66.68% from N3.556 trillion in 2007 to N1.185 trillion in 2018 whilst foreign transactions increased by 97.88% from N616 million to N1.219 trillion over the same period.
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.
However, from the beginning of the financial year 2019 till date, total foreign transactions carried out is about N688.91 billion whilst total domestic transactions is about N775.51 billion.
