Domestic and Foreign Portfolio Participation in Equity Trading - November 2021

Sunday,December 26, 2021 / 06:40 AM / By NGX / Header Image Credit: NGX

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On a monthlybasis, Nigerian Exchange Limited ("NGX") polls trading figures from marketoperators on their Domestic and Foreign Portfolio Investment (FPI)4 flows. Asat 30 November 2021, total transactions at the nation's bourse decreased by7.95% from N213.07billion (about $513.31million) in October 20215 toN196.14billion (about $472.54million) in November 20216 . The performance ofthe current month when compared to the performance in November 2020(N317.81billion) revealed that total transactions decreased by 38.28%. InNovember 2021, the total value of transactions executed by Domestic Investorsoutperformed transactions executed by Foreign Investors by circa 30% as shownin figure 1 below.

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A further analysis of the total transactions executedbetween the current and prior month (October 2021) revealed that total domestictransactions decreased by 25.82% from N170.65billion in October toN126.58billion in November 2021. However, total foreign transactions increasedby 63.98% from N42.42billion (about $102.21million) to N69.56billion (about$167.58million) between October 2021 and November 2021.

Analysis of DomesticTransactions

Figure 4 below shows that Institutional Investorsoutperformed Retail Investors by 28%. A comparison of domestic transactions inthe current and prior month (October 2021) revealed that retail transactionsdecreased by 21.99% from N58.34billion in October 2021 to N45.51billion inNovember 2021. Similarly, the institutional composition of the domestic marketdecreased by 27.82% from N112.31billion in October 2021 to N81.07billion inNovember 2021.

Historical Analysis ofDomestic and Foreign Transactions

The data in figure 7 below highlights the performanceof the market over the last decade. Over a fourteen (14) year period, domestictransactions decreased by 59.54% from N3.556t in 2007 to N1.439t in 2020 whilstforeign transactions increased by 18.45% from N616bn to N729bn over the sameperiod.

Total domestic transactions accounted for about 74% ofthe total transactions carried out in 2020, whilst foreign transactionsaccounted for about 26% of the total transactions in the same period.

The transaction data for 2021 shows that total foreigntransactions are circa N399.18billion, whilst total domestic transactions arecirca N1.342t.