Domestic and Foreign Portfolio Participation in Equity Trading – August 2021


82293599 350F 43B2 AAB5 45417B044A3DOn a monthly basis, Nigerian Exchange Limited (“NGX”) polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows.

As at 31 August 2021, total transactions at the nation’s bourse decreased marginally by 0.39% from N89.77billion (about $218.20million) in July 20215 to N89.42billion (about $217.53million) in August 20216. The performance of the current month when compared to the performance in August 2020 (N94.45billion) revealed that total transactions decreased by 5.33%. In August 2021, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 44% as shown in figure 1 below.

A further analysis of the total transactions executed between the current and prior month (July 2021) revealed that total domestic transactions decreased by 13.71% from N74.24billion in July to N64.06billion in August 2021. However, total foreign transactions increased by 63.30% from N15.53billion (about $37.75million) to N25.36billion (about $61.69million) between July 2021 and August 2021.


Analysis of Domestic Transactions

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Figure 4 below shows that Institutional Investors outperformed Retail Investors by 0.44%. A comparison of domestic transactions in the current and prior month (July 2021) revealed that retail transactions decreased by 15.16% from N37.59billion in July 2021 to N31.89billion in August 2021. Similarly, the institutional composition of the domestic market decreased by 12.22% from N36.65billion in July 2021 to N32.17billion in August 2021.




Historical Analysis of Domestic and Foreign Transactions

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

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

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The transaction data for 2021 shows that total foreign transactions are circa N262.85billion, whilst total domestic transactions are circa N950.76billion.