How domestic investors led equities market transaction by 70.42% in May
Domestic investors dominated the equities market transactions by 70.42 per cent in May 2020 compared to 29.58per cent traded by foreign investors.
The Nigerian Stock Exchange (NSE) in its “Domestic and Foreign Portfolio Participation in Equity Trading – May 2020” noted that a total N119.15billion transaction was traded by foreign and domestic investors in May.
The reported noted that foreign investors traded N35.24billion in May compared to N83.62billion in the month under review.
The Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, had disclosed that the nation’s capital market is currently dominated by 60 per cent domestic investors as against 40 per cent foreign investors.
Domestic investors at capital market comprises of institutional and retail investors who are taking a position in cheap stocks listed on the NSE.
Speaking at the webinar titled, “Capital Markets in a Pandemic”, he expressed that Nigeria economy in the last three months was facing dwindling crude oil prices and coronavirus pandemic have led to foreign investors exit from the capital market.
He said these challenges mounted significant pressure on the capital market volatility, stressing that The Exchange sustainability in operations played a critical role in domestic participation.
He expressed that the Exchange remote trading and engagement of market stakeholders is yielding results, with an increase domestic investors participation and federal/ state governments decision to access bonds on the capital market.
According to him, “We have seen domestic players coming into the capital market in the context of foreign players doing flight to safety.
“Over to 60 per cent participation in the market activities are currently domestic players which is a major departure from the last four years where we show 50-50 per cent in terms of market participation by domestic and foreign players.”
He explained that the continued trading that was activated at the early lockdown contributed to increased domestic investors, stressing that timely market information drive liquidity.
However, as at May 31, 2020, total transactions at the nation’s bourse decreased by 7.40per cent from N128.67billion (about $332.22million) in April 2020 to N119.15billion (about $307.32million) in May 20206.
The performance of the current month when compared to the performance in May 2019 (N221.13billion) revealed that total transactions decreased by 46.12 per cent.
In May 2020, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 40per cent.
Further analysis of the total transactions executed between the current and prior month (April 2020) revealed that total domestic transactions increased by 11.15 per cent from N75.49billion in April to N83.91 billion in May 2020.
The report by NSE stated, “However, total foreign transactions decreased by 33.73 per cent from N53.18 billion (about $137.37million) to N35.24 billion (about $90.89million) between April and May 2020.
