Domestic and Foreign Portfolio Participation in Equity Trading – December 2020

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On a monthly basis, The Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI)4 flows. As at 31 December 2020, total transactions at the nation’s bourse decreased by 15.28% from N317.81billion (about $813.87million) in November 20205 to N269.24billion (about $687.06million) in December 20206. The performance of the current month when compared to the performance in December 2019 (N127.94billion) revealed that total transactions increased by 110.44%. In December 2020, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 48% as shown in figure 1 below.

A further analysis of the total transactions executed between the current and prior month (November 2020) revealed that total domestic transactions decreased by 20.43% from N250.50billion in November to N199.32billion in December 2020. However, total foreign transactions increased by 3.88% from N67.31billion (about $172.38million) to N69.92billion (about $178.44million) between November and December 2020.

 

Analysis of Domestic Transactions

Figure 4 below shows that Institutional Investors outperformed Retail Investors by 38%. A comparison of domestic transactions in the current and prior month (November 2020) revealed that retail transactions decreased by 42.45% from N106.38billion in November 2020 to N61.22billion in December 2020. The institutional composition of the domestic market also decreased by 4.18% from N144.12billion in November 2020 to N138.09billion in December 2020.

 

Historical Analysis Of Domestic And Foreign Transactions

The data in figure 7 below highlights the performance of the market over the last decade. Over a fourteen (14) year period, domestic transactions decreased by 59.54% from N3.556t in 2007 to N1.439t in 2020 whilst foreign transactions increased by 18.45% from N616bn to N729bn over the same period.

 

Total domestic transactions accounted for about 74% of the total transactions carried out in 2020, whilst foreign transactions accounted for about 26% of the total transactions in the same period.

 

The transaction data for 2020 shows that total foreign transactions carried out was circa N729.21billion, whilst total domestic transactions was circa N1.439t.

 

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