…outperform foreign investors by 66%
The total value of domestic transactions in the last 10 months of 2020 was N989.10 billion as against N591.97 billion foreign deals during the period under review. Investigation by New Telegraph showed that the total value of domestic transaction outperformed that of foreign investors by N397.13 billon or 66.41 per cent. As at October 31, 2020, total transactions at the nation’s bourse increased by 81.45 per cent from N134.97 billion (about $349.85 million) in September 2020 to N244.90 billion (about $634.55 million) in October 2020.
The performance in in 2020 compared to that of October 2019 (N163.16 billion) revealed that total transactions increased by 50.10 per cent. In October 2020, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by circa 34 per cent.
A further analysis of the total transaction executed between the current and prior month (September 2020) revealed that total domestic transactions increased by 71.91 per cent from N94.92 billion in September to N163.18 billion in October 2020. Total foreign transactions also increased by 104.04 per cent from N40.05 billion (about $103.81 million) to N81.72 billion (about $211.75 million) between September and October 2020.
Institutional investors outperformed retail investors by 14 per cent. A comparison of domestic transactions in the current and prior month (September 2020) revealed that retail transactions increased by 95.97 per cent from N35.69 billion in September 2020 to N69.94 billion in October 2020. Institutional composition of the domestic market increased by 57.42 per cent from N59.23 billion in September 2020 to N93.24 billion in October 2020.
Highlights of the performance of the market over the last decade showed that over a 13-year period, domestic transactions decreased by 72.30 per cent from N3.556 trillion in 2007 to N985 billion in 2019 whilst foreign transactions increased by 53.08 per cent from N616 billion to N943 billion over the same period. Total domestic transactions accounted for about 51 per cent of the total transactions carried out in 2019, while foreign transactions accounted for about 49 per cent of the total transactions in the same period. The Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said recently that the sustained trading that was activated at the early lockdown contributed to increased domestic investors, stressing that timely market information drove liquidity. Onyema disclosed that the nation’s capital market was currently dominated by 60 per cent domestic investors as against 40 per cent foreign investors. Speaking at awebinar titled, “Capital Markets in a Pandemic,” he noted that Nigerian economy in the last three months was facing dwindling crude oil prices and coronavirus pandemic have led to foreign investors exit from the capital market. He said: “During the lockdown, we kept the capital market opened. We immediately activated business continuity plans and luckily for us, the evolution of technology and digitalisation at all capital market globally started before the pandemic. We were able to quickly flip the switch and go completely remote. “We were reaching out to our dealing member firms via electronically and supporting corporate that are listed on the Exchange and putting out market moving information. “We engaged with policy makers and regulators to provide various palliatives and accommodations for market players to continue to drive liquidity in the market. “What we have seen as a result is that there has been a significant increase in activities in the capital market at secondary level, driven by domestic players.”