Foreign Investors Close Gap on Domestic Players, Trade 14.15% in August

Kayode Tokede

Foreign investors reduced domestic investors’ control in the stock market transactions after trading 14.15 per cent out of the overall N262.56 billion in August 2023.

This is against domestic that traded 85.85 per cent in August.

Analysts have expressed that foreign investors are reaping significantly from the Central Bank of Nigeria (CBN) foreign exchange unification by taking position in key fundamental stocks on the Exchange.

Both the foreign and domestic investors traded N2.4trillion in stocks in Year-till-Date from N1.89trillion in corresponding period of 2022.

According to “domestic & foreign portfolio participation in equity trading” statistics by NGX, foreign investors traded N37.16billion, while domestic investors traded N225.40 billion in August 2023 out off the overall N262.56billion.

The latest statistics disclosed that, “As at 31 August 2023, total transactions at the nation’s bourse decreased by 62.65 per cent from N702.98billion (about $991.91million) in July 2023 to N262.56billion (about $338.13million) in August6 2023.

“The performance of the current month when compared to the performance in August 2022 (N123.97billion) revealed that total transactions increased by 111.79 per cent. In August 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 72per cent.”

“A further analysis of the total transactions executed between the current and prior month (July 2023) revealed that total domestic transactions decreased by 65.97per cent from N662.44billion in July to N225.40billion in August 2023.

“Similarly, total foreign transactions decreased marginally by 8.34per cent from N40.54billion (about $52.58million) to N37.16billion (about $47.94million) between July 2023 and August 2023,” the report added.

It will be recalled that during a 16-year period, domestic transactions 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.

Total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 per cent of the total transactions in the same period. Also, total domestic transactions during the 8 months of 2023, stood at N2.194 trillion while total foreign transactions stood at N222.78 billion.

Reacting to the development, market analysts described the performance as mixed- positive signs of domestic inflow growth and optimism driven by reforms but also a significant decline in overall market transactions in August 2023 compared to the previous month.