Domestic and Foreign Portfolio Participation in Equity Trading

On 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 30 September 2022, total transactions at the nation’s bourse decreased by 33.94% from N123.97billion (about $289.04million) in August 2022 5 to N81.90billion (about $187.09million) in September 20226 . The performance of the current month when compared to the performance in September 2021 (N118.15billion) revealed that total transactions decreased by 30.68%. In September 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 52% as shown in figure 1 below

Analysis of Domestic and Foreign Transactions For The Month (September ’22)

A further analysis of the total transactions executed between the current and prior month (August 2022) revealed that total domestic transactions decreased significantly by 35.01% from N95.76billion in August to N62.23billion in September 2022. Similarly, total foreign transactions decreased by 30.27% from N28.21billion (about $65.77million) to N19.67billion (about $44.93million) between August 2022 and September 2022

Analysis of Domestic Transactions

Figure 4 below shows that Retail Investors outperformed Institutional Investors by 10%. A comparison of domestic transactions in the current and prior month (August 2022) revealed that retail transactions decreased by 14.14% from N39.81billion in August to N34.18billion in September 2022. Similarly, the institutional composition of the domestic market decreased by 49.87% from N55.95billion in August 2022 to N28.05billion in September 2022.

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 fifteen (15) year period, domestic transactions decreased by 58.80% from N3.556t in 2007 to N1.465t in 2021 whilst foreign transactions also decreased by 29.38% from N616bn to N435bn over the same period.

Total domestic transactions accounted for about 77% of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23% of the total transactions in the same period.

The transaction data for 2022 shows that total domestic transactions are circa N1.648trillion, whilst total foreign transactions are circa N321.04billion.