Domestic investors dominate as portfolio investments surge by 72.83%

Total transactions in Nigeria’s equities market surged to N702.9 billion in July 2023, representing a 72.83per cent surge when compared to the N406.75 billion recorded a month earlier.

This is according to the Domestic and Foreign Portfolio participation in equity trading published by the NGX.

When compared to July 2022 where the total transaction was just N101.1 billion, the equities market has seen a whopping 594.78 per cent increase year on year.

The surge in transactions in the equities market reflects the bullish sentiments demonstrated by investors after the government announced the withdrawal of fuel subsidies and the unification of the exchange rate.

A testament to rising confidence in local markets, domestic investors in Nigeria have significantly overshadowed foreign investors, making up an impressive 88 per cent of total market transactions.

This remarkable turnout from domestic investors can, in part, be attributed to recent governmental policy changes. 

The decision to withdraw fuel subsidies and unify the exchange rate appears to have galvanized domestic investment, rejuvenating interest and participation in the Nigerian equities market.

Month-over-Month Growth: When comparing the data on a month-over-month basis, domestic transactions surged by a notable 83.50 per cent, leaping from N361.01 billion in June to N662.44 billion in July.

This uptick suggests that local confidence in the market is not merely a fleeting sentiment but rather a sustained trend.

But Foreign Investment Wanes: Contrary to the enthusiasm shown by domestic investors, foreign transactions exhibited a slight decrease, falling by 11.37 per cent from N45.74 billion (approximately $60.49 million) in June to N40.54 billion (approximately $52.58 million) in July. 

This dip suggests that efforts may be needed to bolster international confidence in the Nigerian equities market.

Within the pool of domestic transactions, institutional investors have taken the lead, outperforming retail investors by a 30 per cent margin.

Retail transactions weren’t left far behind, experiencing a significant 84.67 per cent growth from N124.52 billion in June to N229.95 billion in July.

Institutional transactions also saw robust growth, increasing by 82.88 per cent from N236.49 billion in June to N432.49 billion in July.