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By Chinwendu Obienyi
Total transactions at the Nigerian Exchange Limited (NGX) rose by 104.33 per cent from N158.26 billion (about $363.81 million) in December 2021 to N323.38 billion (about $777.32 million) in January 2022.
This was even as domestic participation continued to out-perform foreign stakeholding, rising by 87 per cent as against 13 per cent recorded by foreign participation.
This was revealed by the NGX in its Domestic and Foreign Portfolio Investment Report at the weekend. The report, usually prepared on a monthly basis, with trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows, revealed that the performance of the current month when compared to January 2021 (N232.46 billion) showed total transactions increased by 39.11 per cent.
It also revealed that the total value of transactions executed by domestic investors outperformed transactions executed by foreign Investors by 74 per cent. Also, domestic inflows stood at N143.62 billion while domestic outflows stood at N138.45 billion.
The report further stated that the foreign inflow for the month under review stood at N18.10 billion as against N16.73 billion recorded in January 2021 while foreign outflow stood at N23.21 billion as against N30.79 billion.
Commenting on the data, market analysts attributed the increase in transactions on the NGX to a surge experienced from domestic and foreign participation.
They however noted the contribution to total transactions fell to a record low of 12.8 per cent when compared with 22.3 per cent recorded in December 2021.
“We think the continued low participation from the foreign investors reflects the lingering FX liquidity constraints and lack of flexibility in the FX framework. While the declaration of 2021 full year dividends may support market performance in the first half (H1) of 2022, we believe buying activities will be constrained by expectations regarding an uptick in yields in the FI market. Also, FPIs who have exhibited a lackluster interest in domestic equities are likely to remain on the sidelines due to sustained FX liquidity challenges and interest rate hikes by central banks in advanced countries”, analysts at Cordros capital said.
Analysis of the report showed that total transactions executed between the current and prior month (December 2021) revealed that total domestic transactions increased by 129.44 per cent from N122.94 billion in December to N282.07 billion in January 2022.
Similarly, total foreign transactions increased by 16.96 per cent from N35.32 billion (about $81.20 million) to N41.31 billion (about $99.30 million) between December 2021 and January 2022.
Furthermore, the value of domestic transactions executed by Institutional investors outperformed retail investors by 32 per cent, while comparison of domestic transactions in the current and prior month (December 2021) revealed that retail transactions increased by 153.21 per cent from N37.74 billion in December 2021 to N95.56 billion in January 2021.
Similarly, the institutional composition of the domestic market fell 118.91 per cent from N85.20 billion in December 2021 to N186.51 billion in January 2022.
