Total portfolio investment in the equities market amounted to about N6.9 trillion in three years, specifically from 2017 to 2019. Of the total, foreign portfolio investment (FPI) accounted for about N3.37 trillion, which was about 49 per cent and trailed the performance of domestic investors, which represented some 51 per cent (N3.52 trillion) in the review period. Bamidele Famoofo reports
Though portfolio investment flow into the Nigerian Stock Exchange (NSE) witnessed a declining trend in the last three years (2017-2019), participation of domestic portfolio investors with a controlling share of 51 per cent of transaction value, received a boost, surpassing their foreign counterparts. In the three years, domestic portfolio investment (DPI) stood at about N3.52trillion, representing 51.2 per cent of transaction value compared to N3.37trillion delivered by their foreign counterparts in the same period.
Year-on-Year (YoY), total portfolio investment dropped by 5.5 per cent, from N2.54trillion in 2017 to N2.4trillion in 2018. The figure further dropped by 19.6 percent from N2.4trillion in 2018 to N1.93trillion in the financial year ended December 31, 2019.
Meanwhile, FPI recorded a drop of 22.1 per cent in three years, from N1.21trillion in 2017 to N943billion in 2019 while DPI fell by 26.4 percent, from N1.34trillion in 2017 to N986billion at the end of the 2019 financial year.
Between 2011 and 2015, foreign transactions consistently outperformed domestic transactions. However, domestic transactions marginally outperformed foreign transactions in 2016 and 2017, and remained almost at par in 2018.
Monthly Performance Analysis
Breakdown of portfolio investment activities in the market showed that total transactions at the nation’s bourse decreased by 25.84 per cent from N172.52 billion (about $562.89million) in November 2019 to N127.94 billion (about $417.41 million) in December 2019. The performance of the December 2019, when compared to the performance in the same period (December 2018) of the prior year revealed that total transactions increased by 1.65 per cent. In December 2019, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors marginally by 2 percent.
A further analysis of the total transactions executed between the current and prior month (November 2019) revealed that total domestic transactions decreased by 24.4 per cent from N85.76 billion in November to N64.80 billion in December 2019. Similarly, total foreign transactions decreased by 27.22 per cent from N86.76 billion (about $283.1million) to N63.14 billion (about $206 million) between November and December 2019.
The value of domestic transactions executed by institutional investors outperformed retail investors by 24 per cent in December 2019. A comparison of domestic transactions in the current and prior month (November 2019) revealed that retail transactions decreased by 24.03 percent from N32.21 billion in November 2019 to N24.47 billion in December 2019. Similarly, the institutional composition of the domestic market decreased by 24.71 per cent from N53.55 billion in November 2019 to N40.32 billion in December 2019.
The performance of the portfolio investment in November when compared to the performance in the same period (November 2018) of the prior year revealed that total transactions increased by 15.2 per cent. In November 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors marginally by 2 per cent.
A further analysis of the total transactions executed between the current and prior month of October 2019, revealed that total domestic transactions increased by 44.3 per cent from N59.43 billion in October to N85.76 billion in November 2019. However, total foreign transactions decreased by 16.4 percent from N103.73 billion (about $338.4million) to N86.76 billion (about $283.1million) between October and November 2019.
The value of domestic transactions executed by institutional investors outperformed retail investors by 24 per cent. A comparison of domestic transactions in the current and prior month (October 2019) revealed that retail transactions increased significantly by 76.7 percent from N18.23 billion in October 2019 to N32.21 billion in November 2019. However, the institutional composition of the domestic market increased by about 30 percent from N41.20 billion in October 2019 to N53.55 billion in November 2019.
Statistics made available by the NSE showed that total transactions at the nation’s bourse, as at 31 October 2019, increased by 15.4 per cent from N141.45 billion (about $461.50 million) in September 2019 to N163.16 billion (about $532.35 million) in October 2019. The performance of the current month when compared to the performance in the same period (October 2018) of the prior year revealed that total transactions increased by 34.3percent. In October 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 28 percent.
A further analysis of the total transactions executed between the current and prior month (September 2019) revealed that total domestic transactions increased by 26.5 percent from N47 billion in September to N59.43 billion in October 2019. Similarly, total foreign transactions increased by 9.83 percent from N94.45 billion (about $308.2million) to N103.73 billion (about $338.4million) between September and October 2019. The value of domestic transactions executed by institutional investors outperformed retail investors by 38 percent. A comparison of domestic transactions in the current and prior month (September 2019) revealed that retail transactions decreased by about 22 percent from N23.36 billion in September 2019 to N18.23 billion in October 2019. However, the institutional composition of the domestic market increased significantly by 74.3 percent from N23.64 billion in September 2019 to N41.20 billion in October 2019.
The value of domestic transactions executed by institutional investors and retail investors were at par as at the end of third quarter in 2019. A comparison of domestic transactions in September and August 2019 revealed that retail transactions decreased by 2.34 percent from N23.92 billion in August 2019 to N23.36 billion in September 2019. However, the institutional composition of the domestic market declined more significantly by 30.8 percent from N34.17 billion in August 2019 to N23.64 billion in September 2019.
As at end of half year ended June 30, 2019, total transactions at the nation’s bourse increased by 34.4 per cent from N221.13 billion (about $713.7 million) in May 2019 to N297.25 billion (about $970.1 million) in June 2019.
The performance in June, when compared to the performance in the same period (June 2018) of the prior year revealed that total transactions also increased by 58.3 per cent. In June 2019, the total value of transactions executed by domestic investors significantly outperformed transactions executed by foreign investors by 34 per cent.
A further analysis of the total transactions executed between the current and prior month (May 2019) revealed that total domestic transactions increased by 39.4 percent from N143.87 billion in May to N200.51 billion in June, 2019. In contrast, total foreign transactions also increased by 25.2 percent from N77.25 billion (about $252.1 million) to N96.74 billion (about $315.7million) between May and June 2019.
The value of domestic transactions executed by retail investors significantly outperformed institutional investors by 54 per cent. A comparison of domestic transactions in the current and prior month (May 2019) revealed that retail transactions increased by 228.4 per cent from N47.23 billion in May 2019 to N155.12 billion in June 2019. However, the institutional composition of the domestic market reduced significantly by 53 per cent from N96.64 billion in May 2019 to N45.38 billion in June 2019.
The year 2019 however started on a slow tempo with total transactions at the nation’s bourse reduced by 3 per cent from N125.86 billion recorded in December 2018 to N122.08 billion (about $398.8 million) in January 2019. Performance of the market in January 2019 when compared to the performance of the same period (January 2018) in the prior year revealed that total transactions reduced by 69.05 per cent.
The total value of transactions executed by foreign investors outperformed those executed by domestic investors by 10 per cent in January.
