Investor activity on the Nigerian Exchange Limited (NGX) has seen significant growth, with total foreign transactions reaching N145.08 billion in the first half of 2023. Month-on-month, these transactions rose from N37.16 billion in May to N45.74 billion in June, marking a steady upward trend in foreign investments.
The recently released equities trading data for June 2023 shows that total domestic transactions on the NGX amounted to N1.306 trillion, while foreign transactions stood at N145.08 billion for the same period. NGX Regulation Limited, responsible for preparing monthly reports on Domestic and Foreign Portfolio Investment (FPI) flows, revealed that overall transactions on the exchange increased by 25.96 percent from N322.92 billion in May 2023 to N406.75 billion in June 2023. Compared to the performance in June 2022 (N156.52 billion), total transactions in June 2023 showed an impressive increase of 159.87 percent.
A closer look at the data indicates that domestic investors outperformed foreign investors by 78 percent in terms of total value of transactions. Domestic inflows and outflows were recorded at N180.91 billion and N180.11 billion, respectively, while foreign inflows and outflows amounted to N22.72 billion and N23.02 billion.
Further analysis of the total transactions between May and June 2023 reveals a 26.34 percent increase in total domestic transactions, rising from N285.76 billion to N361.01 billion. Similarly, total foreign transactions saw a significant increase of 23.09 percent, climbing from N37.16 billion to N45.74 billion during the same period.
Institutional investors also outperformed retail investors by 32 percent. Comparing domestic transactions in May and June 2023, retail transactions rose by 40.70 percent, reaching N124.52 billion in June. On the other hand, the institutional composition of the domestic market increased marginally by 19.89 percent, amounting to N236.49 billion in June 2023.
Over a 16-year period, domestic transactions experienced a decline of 45.30 percent, decreasing from N3.556 trillion in 2007 to N1.945 trillion in 2022. Similarly, foreign transactions decreased by 38.47 percent during the same period, dropping from N616 billion to N379 billion. Domestic transactions accounted for approximately 84 percent of the total transactions carried out in 2022, while foreign transactions made up about 16 percent of the total transactions in the same period.
The steady rise in foreign transactions on the NGX demonstrates growing confidence in the Nigerian stock market. As investor activity continues to evolve, analysts are closely monitoring these trends to gauge the market's overall resilience and attractiveness to both domestic and foreign investors.
