Domestic inflows on NGX hits N118bn in August
Despite the challenges faced by the Nigerian economy, domestic inflows rose by N118 billion in the month of August 2023, reflecting optimism for domestic growth with the new promulgation of long needed reforms.
This is according to the Domestic and Foreign Portfolio Investment Report of Nigerian Exchange Limited (NGX) for the month of August 2023.
The Domestic and Foreign Portfolio Investment Report is prepared on a monthly basis by NGX Regulation Limited, with trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows. These transactions which are carried out by Domestic and Foreign investors revealed that the total value of transactions executed by domestic investors outperformed transactions executed by foreign Investors by 72 per cent while domestic outflows stood at N107.38 billion.
However, total transactions at the nation’s bourse decreased by 62.65 per cent from N702.98 billion (about $991.91 million) in July 2023 to N262.56 billion (about $338.13 million) in August 2023. The performance of the current month when compared to the performance in August 2022 (N123.97 billion) revealed that total transactions increased by 111.79 per cent.
A further analysis of the total transactions executed between the current and prior month (July 2023) revealed that total domestic transactions decreased by 65.97 per cent from N662.44 billion in July to N225.40 billion in August 2023. Similarly, total foreign transactions decreased marginally by 8.34 per cent from N40.54 billion (about $52.58 million) to N37.16 billion (about $47.94 million) between July 2023 and August 2023.
The report also revealed that institutional Investors outperformed retail Investors by 14 per cent. A comparison of domestic transactions in the current and prior month (July 2023) revealed that retail transactions decreased by 57.76 per cent from N229.95billion in July to N97.13 billion in August 2023. Similarly, the institutional composition of the domestic market decreased by 70.34 per cent from N432.49 billion in July 2023 to N128.27 billion in August 2023.
It will be recalled that during a 16-year period, domestic transactions decreased by 45.30 per cent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 per cent from N616 billion to N379 billion over the same period.
Total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 per cent of the total transactions in the same period. Also, total domestic transactions during the 8 months of 2023, stood at N2.194 trillion while total foreign transactions stood at N222.78 billion.
Reacting to the development, market analysts described the performance as mixed- positive signs of domestic inflow growth and optimism driven by reforms but also a significant decline in overall market transactions in August 2023 compared to the previous month.
