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NSE: Foreign outflows down by 38.34% to N42bn in April

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NSE: Foreign outflows down by 38.34% to N42bn in April

Bearish
When compared to the same period of 2018, the performance of the month revealed that total transactions reduced by 29.83 per cent

 

Total foreign transactions outflow in Nigeria’s stock market increased by 38.34 per cent from N30.20 billion to N41.78 billion in April.

According to a report obtained by New Telegraph, the value of the domestic transactions executed by institutional investors outperformed retail investors by 18.00 per cent. A comparison of domestic deals in the current and prior month (March 2019) revealed that retail transactions increased marginally by 6.6 per cent from N27.44 billion in March 2019 to N29.26 billion in April 2019.

However, the institutional composition of the domestic market increased more significantly by 60.75 per cent from N26.58 billion in March 2019 to N42.73 billion in April 2019.

A further analysis of the total transactions executed between the current and prior month (March 2019) revealed that total foreign transactions increased by 37.13 per cent from N56.09 billion in March 2019 to N76.92 billion in April 2019.

As at 30 April 2019, total deals at the nation’s bourse increased by 35.24 per cent from N110.10 billion (about $359.3 million) recorded in March 2019 to N148.91 billion (about $485.9 million) in April 2019.

The performance of the current month when compared to the performance in the same period (April 2018) of the prior year revealed that total transactions reduced by 29.83 per cent. In April 2019, the total value of transactions executed by foreign investors outperformed those executed by domestic investors by 4.00 per cent.

Highlights of the performance of the market over the last decade showed that foreign transactions, which stood at N1.539 trillion in 2014 declined to N1.219 trillion in 2018. Over the 12 year period, domestic transactions decreased by 66.68 per cent from N3.556 trillion in 2007 to N1.185 trillion in 2018.

Total foreign transactions accounted for about 51 per cent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49 per cent of the total transactions in the same period.

Acting Director General of the Securities and Exchange Commission, SEC, Ms. Mary Uduk, who spoke while responding to questions from journalists recently, said the outflow has led to sell pressure accumulating into depressed prices.

This, she said, is one of the reasons why the Commission is mapping out strategies to build confidence in the market and encourage more retail investors.

The Exchange also said that currently there are about 3 million retail investors in the Nigerian Capital Market, representing only three per cent of the total adult populace in the country.

The Divisional Head, Trading Business, Mr. Jude Chiemeka, disclosed this recently at maiden edition of Retail Investor Workshop tagged “Investment Masterclass; Making your money work” organised by NSE.

According to Chiemeka, “Nigeria has a population of over 190 million people and is the second largest economy in Africa. However, the current Financial Inclusion indices of 48 per cent leave much to be desired. Financial Inclusion is a priority of stakeholders in the Capital Market, and the Nigerian Stock Exchange makes it a primary concern to contribute towards the achievement of Nigeria’s National Financial Inclusion Strategy of reducing the proportion of adult Nigerians that are financially excluded to 20 per cent in the year 2020.”

 

 

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