Report: Domestic Transactions Exceed 2022 Figure, Now N1.968trn
The value of domestic transactions on the Nigerian Exchange Limited (NGX) has hit N1968.4bn, year-to-date, which is 1.18 per cent higher than the entire value of transactions by domestic investors for the year 2022, which stood at N1945bn.
The year-to-date value of domestic transactions as of July 2022 was N1.49tn
This was revealed in the latest Domestic & Foreign Portfolio Investment Report released by the Nigerian Exchange Limited for July 2023.
According to the report, domestic investors have remained dominant on the local bourse as foreign investors ignore Nigeria and its yet-to-be won battle with forex which has worsened with the floating of the Naira since the mid-June announcement of the Central Bank of Nigeria harmonising segments of the currency markets into the official Investors $ Exporters window.
The report revealed that at the end of July, transaction data for 2023 shows that total domestic transactions are about N1.968tn, whilst total foreign transactions are about N185.62bn.
On a month-on-month basis, domestic transactions on the NGX at the end of July rose by 83.5 per cent to N662.44bn from N361.01bn recorded in June 2023.
Also, foreign inflow dwindled to N 9.45bn in July 2023, a sharp decline from N22.72bn recorded in June. Foreign inflow had ticked up in May to N27.51bn while the inflows for previous months in the year had been less than N10bn.
However, the total foreign transactions decreased marginally by 11.37 per cent from N45.74bn (about $60.49m) to N40.54bn (about $52.58m) between June 2023 and July 2023.
Meanwhile, trading figures from market operators showed that as of July ending, total transactions at the nation’s bourse increased by 72.83 per cent from N406.750bn (about $537.87m) in June 2023 to N702.98bn (about $911.91m) in July 2023.
The performance of the current month when compared to the performance in July 2022 (N101.18bn) revealed that total transactions increased by 594.78 per cent. In July 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 88 per cent.
Recall that the former chairman of FBN Holdings, Oba Otudeko, had bought over four billion shares of the lender in a deal worth N87.8bn, through a company where two of his children have controlling interests. The transaction is reported to be the largest volume of First bank shares traded in a single day since 2012, when the stock exchange started publishing data.
A breakdown of the domestic transactions showed that Institutional Investors outperformed Retail Investors by 30 per cent in July 2023. A comparison of domestic transactions in the current and prior month (June 2023) revealed that retail transactions increased by 84.67 per cent from N124.52bn in June to N229.95bn in July 2023. Similarly, the institutional composition of the domestic market increased by 82.88 per cent from N236.49bn in June 2023 to N432.49bn in July 2023.
Reacting financial expert, Okechukwu Unegbu, lamented that foreign investors are ignoring Nigeria, saying, “You know there is no forex in Nigeria now. We have less than $5m in our foreign reserves. Most of the investors who come into Nigeria are now avoiding the country; we are no longer getting the foreign direct investment we used to have.”
