Foreign Investors Drop Equity Investments To 6.5%, Stock Market Total Transactions Hit N702.9bn

The capital market authority, the Nigerian Exchange Limited (NGX), has disclosed that the total transactions recorded by domestic and foreign equity investors was N702.9 billion in July 2023.

According to a report obtained from the NGX, the total equity transactions recorded last month increased by 72.83 per cent from the N406.75 billion posted in June of the same year.

Figure obtained from the capital market report showed that on a year-on-year comparison, the total transactions rose by 595.2 per cent, considering the N101.1 billion recorded in July 2022.

It further stated that domestic investors increased their transactions to N662.44 billion in July, which is an 83.50 per cent rise from N361.01 billion reported the month before.

However, the foreign investors dropped their transactions by 11.37 per cent to N40.54 billion in July 2023, compared to the N45.74 billion reported in June.

Due to the increase in domestic transactions and reduction in foreign participation, the former accounted for 94.2 per cent of the total market transactions, while foreign investors held 6.5 per cent in July.

Note that in June, the foreign investors accounted for 11.24 per cent and the domestic investors held 88.5 per cent, reflecting an upward and downward movement among both classes of participants.

Also, local retail and institutional investors increased the value of their transactions in July, according to the capital market report, although the latter accounted for a higher percentage.

The breakdown showed that retail transactions rose to N229.95 billion in July this year, compared to N124.52 billion in June. This indicates an increase of 84.67 per cent.

Similarly, institutional investors recorded an 82.88 per cent increase in their transactions. They transacted N432.49 billion in the review month, rising from N236.49 billion reported in June.

Meanwhile, the decline in foreign investors transactions spells doom for the Exchange Traded Funds (ETFs), according to a previous statement by the NGX Chief Executive Officer, Temi Popoola, in April.

“It is incumbent to state that current macro-economic challenges resulting in the exit of Foreign Investors, impacted the ETFs space which resulted in a sharp dip in the ETFs market Cap from 2020 highs of N24.5bn,” he said.

According to Popoola, a positive policy from President Bola Tinubu’s government could lead to a turnaround for the ETFs, “We are hopeful that the policy tilt of the new administration would impact positively on our market,” the NGX chief stated.