…outperforms foreign investors by 53%
Total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by circa 12 per cent
he total value of domestic transactions executed by domestic investors in the first half of 2020 was N606.91 billion against N396.63 billion, which was the total foreign transactions carried out during the period under review.
Investigation by New Telegraph showed that the total value of domestic transactions outperformed those executed by foreign investors by N210.28 billion or 53 per cent.
According to report obtained from the Nigerian Stock Exchange, as at June 30, 2020, total transactions at the nation’s bourse increased by 8.17 per cent from N119.15 billion (about $307.32 million) in May 2020 to N128.88 billion (about $333.25 million) in June 2020.
The performance of the current month when compared to the performance in June 2019 (N297.25 billion) revealed that total transactions decreased by 56.64 per cent. In June 2020, the total value of transactions executed by domestic Investors outperformed transactions executed by foreign investors by circa 12 per cent.
A further analysis of the total transactions executed between the current and prior month (May 2020) revealed that total domestic transactions decreased by 13.55 per cent from N83.91 billion in May to N72.54 billion in June 2020.
However, total foreign transactions increased by 59.88 per cent from N35.24 billion (about $90.89 million) to N56.34 billion (about $145.68 million) between May and June 2020.
Further check revealed that institutional investors outperformed retail Investors by 10 per cent.
A comparison of domestic transactions in the current and prior month (May 2020) revealed that retail transactions decreased by 23.35 per cent from N42.19 billion in May 2020 to N32.34 billion in June 2020.
Whilst the institutional composition of the domestic market also decreased by 3.64 per cent from N41.72 billion in May 2020 to N40.20 billion in June 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, whilst 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 last week at a webinar titled: “Capital Markets in a Pandemic,” he noted that Nigerian economy in the last three months was facing dwindling crude oil price and that the coronavirus pandemic had led to foreign investors to 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 markets 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 electronics and supporting the corporate 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.”