The value of transactions by domestic and foreign investors on Nigerian Exchange Limited (NGX) between January and May stood at N1.506 trillion.
The figure rose by 61.3 per cent compared with N933.65 billion recorded in the corresponding period of 2021.
Trading reports at the NGX showed that domestic investors continued to account for more than two thirds of transactions at the stock market despite rising inflation and currency volatility in the foreign exchange market which remained key drivers of the domestic and foreign portfolio investment.
Segmental analysis showed that foreign transactions stood at N201.29 billion, accounting for about 13.37 per cent of the total transactions carried out from January to May 2022, while domestic transactions constituted N1.304 trillion, representing 86.63 per cent of the total transaction.
Analysis of domestic transactions showed that institutional investors outperformed retail investors. A comparison of domestic transactions in the period under review revealed that retail transactions pulled N408.03 billion in investment, while institutional investors’ investment amounted to N896.21 billion from January to May 2022.
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For May 2022, total transactions increased by 195.05 per cent from N205.88 billion-about $494.26 million; in April 2022 to N607.45billion-about $1.45 billion; in May 2022. The performance of the current month when compared to the performance in May 2021 at N97.19 billion indicated that total transactions increased by 525.01 per cent. In May 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by foreign investors by 86 per cent.
Subsequently, the total transactions executed between the current and prior month revealed that total domestic transactions increased by 214.40 per cent from N178.80 billion in April 2022 to N562.15 billion in May 2022. In contrast, total foreign transactions increased by 67.28 per cent from N27.08 billion or about $65.01 million to N45.30 billion or about $108.02 million between April 2022 and May 2022.
The stock market had regained more confidence at the start of the year, with key drivers like BUA Foods, listing on NGX; investors’ reaction to companies’ full-year earnings and dividend declarations; predominance of domestic players over foreign players in the market, and low yields in the fixed income market which forced investors to consider more profitable securities in the equity market.
Market analysts said domestic investors might have been taking advantage of the low prices of stocks on the NGX to increase their investments.
Analysts said investors were increasing their stakes in the equities market due to the attractive dividend yield in the market and because of the low yield environment in the fixed income market.
They noted that the development was good for the market as it would restore credibility and stability to the market, which was hitherto marred by volatility occasioned by the activities of foreign investors.