Local patronage rakes N1.6tr, foreigners trail with N334b
Prolonged foreign exchange shortages, uncertainty, insecurity and other macroeconomic woes have continued to increase foreigners’ apathy for stocks, as foreign transactions accounted for a paltry 11 per cent of transactions in the country’s equities market in 2023, against local patronage of 89 per cent.
According to the April edition of NGX Report on domestic and foreign portfolio participation in equities, domestic transactions accounted for about 89 per cent of the total transactions carried out within the same period.
A breakdown of the transaction data for 2024 showed that total domestic transactions hit N1.6 trillion, while total foreign transactions stood at N334.01 billion.
According to the report, domestic transactions decreased by 10.9 per cent from N3.6 trillion in 2007 to N3.2 trillion in 2023, while foreign transactions decreased by 33.3 per cent from N616 billion to N411 billion over the same period.
Further breakdown of the report showed that total transactions at the nation’s bourse as of April 30, 2024 decreased by 35.7 per cent from N538.5 billion (about $404.69 million) on March 5, 2024 to N346.23 billion (about $260.24 million) on April 6. 2024.
It stated that the performance this month when compared to April 2023 (N191.21 billion) revealed that total transactions increased significantly by 81.07 per cent.
Also, in April 2024, the value of transactions executed by domestic investors outperformed transactions by foreign investors by 30 per cent.
Domestic transactions decreased by 49.2 per cent from N444.3 billion in March to N225.40 billion in April 2024.
However, total foreign transactions increased by 28.2 per cent from N94.3 billion (about $70.83 million) to N120.83 billion (about $90.83 million) between March 2024 and April 2024.
Institutional Investors outperformed Retail Investors by 10 per cent, while a comparison of domestic transactions in the present and prior month (March 2024) revealed that retail transactions decreased by 54.9 per cent from N223.4 billion in March to N100.8 billion in April 2024.
Similarly, the institutional composition of the domestic market decreased by 43.6 per cent from N220.9 billion in March 2024 to N124.6 billion in April 2024.
Analysts at Coronation Research said: “This is an indication that foreign investors’ appetite for the local equity market is still low. The decline also followed a pattern that had been observed since the beginning of the year.”
