Domestic Investors’ Dominance In Stock Market Drops To 76.26% In November, Says Report

A report by the Nigeria Exchange Limited (NGX) disclosed that domestic investors’ dominance in the stock market reduced to 76.26 percent in November 2023 from 84.90 percent reported in October.

The Exchange in its “domestic & foreign portfolio participation in equity trading” report disclosed that foreign investors contributed about 23.74 percent in November 2023, up from 15.10 percent in October 2023.

Capital market analysts have attributed the growth in foreign investors’ increasing participation in the equities market to foreign exchange unification moves by the federal government as they take positions in cheap fundamental stocks.

In November 2023, total transactions by both foreign and domestic stood at N300.67 billion with foreign investors transacting N71.37 billion and domestic investors N229.30 billion.

The report stated that “As of 30 November 2023, total transactions at the nation’s bourse increased by 34.08per cent from N220.94billion (about $243.93million) in October 5, 2023, to N300.67billion (about $319.15million) on November 6 2023. The performance of the current month when compared to the performance in November 2022 (N104.28 billion) revealed that total transactions increased by 188.33 percent.

“In November 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 52 percent.”

A further analysis of the total transactions executed between the current and prior month (October 2023) revealed that total domestic transactions increased by 22.24 percent from N187.58 billion in October to N229.30 billion in November 2023, the report disclosed.

“Similarly, total foreign transactions increased by 113.94 percent from N33.36 billion (about $ 36.83 million) to N71.37 billion (about $ 75.76 million) between October 2023 and November 2023,” it explained.

Institutional investors outperform Retail Investors by 20 percent.

A comparison of domestic transactions in the current and prior month (October 2023) revealed that retail transactions increased by 7.30 percent from N86.46 billion in October to N92.78 billion in November 2023.

Similarly, the institutional composition of the domestic market increased by 35.01 percent from N101.12 billion in October 2023 to N136.52 billion in November 2023.

The report explained that “Over 16 years, domestic transactions decreased by 45.30 percent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 percent from N616 billion to N379 billion over the same period.

“Total domestic transactions accounted for about 84 percent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 percent of the total transactions in the same period.

“The transaction data for 2023 shows that total domestic transactions are circa N2.871 trillion, whilst total foreign transactions are circa N362.75 billion.”