By Chukwuma Umeorah
Domestic investors on the Nigerian Exchange Limited outshined their foreign peers with a total value of transactions at N170.20 billion compared to foreign transactions which stood at N24.90 billion in January 2023.
The total value of transactions increased by 38.66 per cent from N140.70 billion (about USD305.15million) in December 2022 to N195.10 billion (about USD422.94million) in January 2023. This is even as domestic investors outperformed foreign investors by N145.30 billion or 584 per cent.
According to the Domestic and Foreign Portfolio Investment (FPI) January 2023 report which captured these transactions as well as trading figures from market operators, domestic transactions stood at N170.20 billion surpassing foreign transactions by 74 per cent which stood at N24.90 billion in the same period.
This meant that total domestic transactions on the NGX for January increased significantly by 35.63 per cent from N125.49 billion in December to N170.20 billion in January 2023.
Likewise, total foreign transactions increased by 63.71 per cent from N15.21 billion (about $32.99 million) to N24.90 billion (about $53.98 million) between December 2022 and January 2023.
However, the performance of the current month when compared to January 2022, which was N323.38 billion revealed that total transactions decreased by 39.66 per cent to N195.10 billion January 2023. This could be attributed to many economic headwinds bedeviling the country’s economy and the trend of investors applying cautious sentiments in election seasons as they aim to reduce market exposure.
Further analysis shows that Institutional Investors outperformed Retail Investors by 58 per cent. When compared to transactions of prior month, retail transactions increased by 1.08 per cent from N35.28billion in December to N35.66billion in January 2023. The institutional composition of the domestic market increased by 49.14 per cent from N90.21 billion in December 2022 to N134.54billion in January 2023.
A review of the performance over a 16-year period, shows domestic transactions decreased by 45.30 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 while foreign transactions also decreased by 38.47 per cent from N616 billion to N379 billion over the same period.
Total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022, while foreign transactions accounted for about 16 per cent of the total transactions in the same period.