Domestic outperforms foreign transactions on Nigeria’s stock exchange in 7 months of 2022

The total transactions done by domestic investors on the floor of the Nigerian Exchange Limited (NGX) grew by N1.490 trillion as against N273.16 billion recorded by foreign investors in the first seven months of 2022.

According to the Domestic and Foreign Portfolio Investment (FPI) July 2022 report which captured these transactions as well as trading figures from market operators, domestic transactions stood at N1.465 trillion in the first seven months of 2021 while foreign transactions stood at N435 billion in the same period.

This meant that total domestic transactions on the NGX grew by 1.70% while foreign transactions dropped by 37.24%. Although the July report revealed that total transactions at the nation’s bourse decreased by 35.36% from N156.52billion (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%.

Market outlook

• The total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 42% while domestic inflows and outflows stood at N36.97 billion and N34.53 billion respectively, in the month of July 2022.
• On the flip side, foreign inflows recorded N13.68 billion while foreign outflows stood at N16 billion. This decline, according to analysts, is due to the scarcity of FX currently bedevilling the economy.
• Since the outbreak of COVID-19, inflows across capital importation, loans, diaspora remittances, exports, income from investments and other autonomous sources have been dwindling. However, domestic investors have continued to hold its ground on the floor of the NGX despite rising inflation and currency volatility in the foreign exchange market, which remained key drivers of domestic & foreign portfolio investment.
• Over a fifteen-year period, domestic transactions had decreased by 58.80% from N3.556 trillion in 2007 to N1.465 trillion in 2021 whilst foreign transactions also decreased by 29.38% from N616 billion to N435 billion over the same period.
• On the other hand, total domestic transactions accounted for about 77% of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23% of the total transactions in the same period.