Equities market: Domestic investors accounted for 80% of transactions in Jan

Domestic investors in the equities market accounted for 80 per cent of the total value of transactions in January, leaving their foreign counterparts with a paltry 20 per cent.

Data on domestic and foreign portfolio participation, released by Nigerian Stock Exchange shows that the total transactions at the nation’s bourse decreased by 13.66 per cent from N269.24billion in December 2020 to N232.46billion in January 2021.

In January, the value of transactions by domestic investors was N184.9 billion, led by institutional investors with N117.50 billion, outperforming retail Investors by 28 per cent.

A key driver for domestic investors in January was the accommodative monetary policy response from the Central Bank of Nigeria (CBN) which gave rise to low-interest rates, and expectation of release of annual results by companies alongside dividend payment.

While foreign investors remain cautious due to a lack of clarity on the country’s forex policy of the CBN.

A comparison of domestic transactions in January and December 2020 revealed that retail transactions increased by 10.16 per cent from N61.22billion in December 2020 to N67.44billion in January 2021.

The institutional composition of the domestic market also decreased by 14.91 percent from N138.09billion in December 2020 to N117.50billion in January 2021.

The market performance in January 2021, when compared to the performance in January 2020 (N235.46billion) revealed that total transactions decreased marginally by 1.27 percent.

Further analysis of the total transactions executed between January and December 2020 revealed that total domestic transactions decreased by 7.21 per cent from N199.32billion in December to N184.94billion in January 2021.

Additionally, total foreign transactions decreased by 32.04per cent from N69.92billion to N47.52billion between December 2020 and January 2021.