New Telegraph

NSE records N269bn in December transactions

POSITIVE

Institutional investors outperformed retail investors by 38 per cent

 

Total transactions at the nation’s bourse for the month ended December 31, 2020, was N269.24 billion as against N127.94 billion in 2019. The performance, compared to December 2019, revealed that total transactions increased by 110.44 per cent, according to a report obtained from the Nigerian Stock Exchange (NSE).

 

 

However, the total transactions decreased by 15.28 per cent as at December 2020 from N317.81 billion (about $813.87 million) in November 20205 to  N269.24 billion (about $687.06 million) in December 2020. In December 2020, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 48 per cent.

 

A further analysis of the total transactions executed between the current and prior month (November 2020) revealed that total domestic transactions decreased by 20.43 per cent from N250.50 billion in November to N199.32billion in December 2020.

 

However, total foreign transactions increased by 3.88 per cent from N67.31 billion (about $172.38 million) to N69.92 billion (about $178.44 million) between November and December 2020. Institutional Investors outperformed retail investors by 38 per cent.

 

A comparison of domestic transactions in the current and prior month (November 2020) revealed that retail transactions decreased by 42.45 per cent from N106.38 billion in November 2020 to N61.22 billion in December 2020.

 

The institutional composition of the domestic market also decreased by 4.18 per cent from N144.12 billion in November 2020 to N138.09 billion in December 2020. Highlights of the performance of the market over the last decade showed that over a 14- year period, domestic transactions decreased by 59.54 per cent from N3.556 trillion in 2007 to N1.439 trillion in 2020 whilst foreign transactions increased by 18.45 per cent from N616 billion to N729 billion over the same period. Total domestic transactions accounted for about 74 per cent of the total transactions carried out in 2020, whilst foreign transactions accounted for about 26 per cent of the total transactions in the same period.

 

 

The transaction data for 2020 showed that total foreign transactions carried out was circa N729.21 billion, whilst total domestic transactions was circa N1.439 trillion.

 

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 against 40 per cent foreign investors.

 

Speaking at a webinar titled: “Capital Markets in a Pandemic,” he noted that Nigeria 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 digitalization 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 activities in the capital market at secondary level, driven by domestic players.”

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