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By Chinwendu Obienyi and Chukwuma Umeorah
The total domestic transactions performed by investors at the trading floor of Nigerian Exchange Limited (NGX) has risen to N1.968 trillion in the first seven months of 2023, data from the domestic and foreign portfolio investment report of NGX for July 2023 revealed.
The report which is prepared on a monthly basis by NGX Regulation Limited, with trading figures from market operators on FPI flows, showed that domestic transactions over a 16-year period decreased by 45.30 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 per cent from N616 billion to N379 billion over the same period due to loss of confidence from investors.
However, changes in policies adopted by the previous administration ensured that total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022. On the flipside, foreign transactions accounted for about 16 per cent of the total transactions in the same period.
According to the report, the transaction data for 2023 shows that total domestic transactions are circa N1.968 trillion, whilst total foreign transactions stood at N185.62 billion. Total transactions at the nation’s bourse increased by 72.83 per cent from N406.75 billion (about $537.87million) in June 2023 to N702.98 billion (about $911.91million) in July 2023.
The performance of the current month when compared to the performance in July 2022 (N101.18 billion) revealed that total transactions increased by 594.78 per cent owing to investors’ positive reactions to the reforms taken by President Bola Tinubu. This translated to domestic investors out-performing transactions executed by foreign investors by 88 per cent.
A further analysis of the total transactions executed between the current and prior month (June 2023) revealed that total domestic transactions increased by 83.50 per cent from N361.01 billion in June to N662.44 billion in July 2023. However, total foreign transactions decreased marginally by 11.37 per cent from N45.74 billion (about $60.49 million) to N40.54 billion (about $52.58 million) between June 2023 and July 2023.
It will be recalled that the FG has embarked on some reforms such as the removal of fuel subsidies and the unification of exchange rates to ensure the return of foreign inflows. Just recently, NGX in its bid to work with FG in addressing the country’s FX challenges, proposed dollar asset listings for firms within the free trade zones, stating that disbursing dividends in dollars could potentially address the challenges posed by fluctuations in forex currently bedeviling the economy.
