By Chinwendu Obienyi
The total domestic inflows on the floor of the Nigerian Stock Exchange (NSE) grew by N84.23 billion despite the rise in yields in the fixed income environment.
According to the Domestic and FPI report for February 2021, the foreign inflows dropped to N23.2 billion while the total value of transactions traded at the exchange declined by 7.3 per cent month-on-month (m/m) to N215.58 billion in February 2021 as against N232.46billion recorded in January – the third consecutive month of decline.
The performance of the current month when compared to the performance in February 2020 (N148.50 billion) revealed that total transactions increased by 45.17 per cent, whereas in February 2021, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 42 per cent.
A further analysis of the total transactions executed between the current and prior month (January 2021) revealed that total domestic transactions decreased by 16.99 per cent from N184.94 billion in January to N153.51 billion in February 2021.
However, total foreign transactions increased by 30.62 per cent from N47.52billion (about $120.78 million) to N62.07 billion (about $151.23 million) between January and February 2021.
The report stated that institutional investors outperformed retail investors by 30 per cent while a comparison of domestic transactions in the current and prior months (January 2021) revealed that retail transactions decreased by 20.23 per cent from N67.44 billion in January 2021 to N53.80 billion in February 2021.
The institutional composition of the domestic market also decreased by 15.14 per cent from N117.50 billion in January 2021 to N99.71 billion in February 2021.
Commenting on the report, analysts at Cordros Securities, explained that drop in domestic participation was due to the fact that domestic investors began to reshuffle their portfolio, favouring fixed income instruments due to the higher yields in that space.