Equities: Domestic investors outperformed foreigners by N709bn in 2020

Domestic investors seeking better returns, amid low yield environment in the fixed income market, outperformed their foreign counterpart by N709.7 billion in 2020.

Latest figures from the Nigeria Stock Exchange (NSE) ‘Domestic & Foreign Portfolio Investment Report’ for the month of December 2020 show that domestic investors accounted for 66.37 per cent of the total value of transactions in 2020 at N1.43 trillion — beating 2010 record of 64 per cent.

During the year, foreign investors account for a paltry 33.63 per cent of total value of transactions  at N729.20 billion — the lowest since 2010 at 36 per cent.

The reality of the Covid-19 pandemic and the ensuing crude oil market crash which brought oil prices to an all-time low, resulted in a market crash in March, as foreign investors fled the market, amid heightened devaluation risk, and dollar scarcity.

As at 31 December 2020, total value of transactions at the nation’s bourse decreased by 15.28 per cent from N317.81billion  in November 20205 to N269.24billion in December 2020.

The total transactions executed between December and November revealed that total domestic transactions decreased by 20.43 per cent from N250.50billion in November to N199.32billion in December 2020.

However, total foreign transactions increased by 3.88 per cent from N67.31billion  to N69.92billion between November and December 2020.

For local investors, institutional investors outperformed retail Investors by 38 per cent. A comparison of domestic transactions in December and November 2020 revealed that retail transactions decreased by 42.45 per cent from N106.38billion in November 2020 to N61.22billion in December 2020.

The institutional composition of the domestic market also decreased by 4.18 per cent from N144.12billion in November 2020 to N138.09billion in December 2020.

The equities market closed the year with 50 per cent gain at 40,270.7 points, the most since December 2007.

The equity index is the world leader among the 93 stock indexes tracked by Bloomberg.