TOTAL transactions on the Nigerian Exchange Limited (NGX) mellowed to N1.74 trillion Year-To-Date (YTD) in November 2021 from N1.89 trillion YTD in November 2020, while total domestic transactions rose, Year-on-Year (YoY) to N1.34 trillion from N1.24 trillion.
According to the recently released report by the NGX on domestic and foreign portfolio participation in equities trading, total equities market transactions moderated Year-to-Date (YTD) in November 2021 compared to the value of transactions executed YTD in November 2020.
The decline in the total transaction was chiefly due to the weak appetite of foreign portfolio investors (FPIs) amid fears of foreign exchange volatility eroding their returns on investment.
However, local investors dominated the equities market as they accumulated more shares to take a position in some fundamentally sound stocks following the release of corporates’ nine-month financial results which were largely positive.
Local players participation in the equities market increased in the second half of the year more than that of the first as fixed income securities yields, especially treasury bills yield, slid southward in H2 2021 contrary to its northward direction in H1 2021. Further breakdown showed that domestic institutional investors generated the highest transaction value, followed by retail investors; while foreign portfolio investors’ contribution remained the least with a 9.69 per cent net increase in outflows.
Total domestic transactions increased by 8.24 per cent while total foreign portfolio transactions plummeted by 39.45 per cent as foreign investors outflows improved.
However, the FPI transactions decreased significantly to N399.18 billion in the review period from N659.28 billion in November 2020. A further breakdown of the FPI transactions YTD in November 2021 showed that foreign portfolio inflows moderated to N189.42 billion from N226.13 billion; also, foreign portfolio outflows decreased to N209.76 billion YTD in November 2021 from N433.15 billion YTD in November 2020.
On the part of local investors, there was an increased stake in the equities market as purchase transactions were N679.29 billion, higher than N662.45 billion worth of outflows.
Further breakdown showed that retail inflow transactions were N264.95 billion, lower than N275.34 billion outflows as they largely sold off than they bought. The domestic institutional investors’ inflow transactions were N414.24 billion, higher than the N387.17 billion worth of outflows from them.
Hence, as the local institutional investors threw their weight behind the equities market chiefly in H2 2021, the NSE All Share Index (ASI) rocketed by 7.39 per cent to 42,262.85 index points YTD in November 2021.
and then