By Chinwendu Obienyi
Despite the weak macroeconomic situation in Nigeria, total transactions at the floor of the Nigerian Exchange Group (NGX) increased by 5.99 per cent from N215.58 billion (about $525.21million) in February 2021 to N228.49 billion (about $560.55 million) in March 2021.
According to the NGX’s Domestic and Foreign Portfolio Investment (FPI) report for the month under review, the performance of the current month when compared with the performance in March 2020 (N242.91billion) revealed that total transactions decreased by 5.94 per cent.
The report revealed that the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 64 per cent.
A further analysis of the total transactions executed between the current and prior month (February 2021) revealed that total domestic transactions increased by 22.37 per cent from N153.51 billion in February to N187.85 billion in March 2021. However, total foreign transactions decreased by 34.53 per cent from N62.07 billion (about $151.23 million) to N40.64 billion (about $99.70 million) between February 2021 and March 2021.
Also, domestic inflows dwarfed the performance of foreign inflows as it recorded about N94.55 billion as against N20.36 billion while domestic outflows hit N93.31 billion as against foreign outflows (N20.28 billion) while retail investors outperformed institutional investors by 16 per cent.
A comparison of domestic transactions in the current and prior months (February 2021) revealed that retail transactions increased by 101.77 per cent from N53.80 billion in February 2021 to N108.55 billion in March 2021. However, the institutional composition of the domestic market decreased by 20.47 per cent from N99.71 billion in February 2021 to N79.30 billion in March 2021.
Commenting on the report, Analysts at Cordros Capital, said the total value of foreign participation in March is the lowest since September 2020 (N40.05 billion), adding that the current figure was induced by rising bond yields in the U.S at the time amid lingering foreign exchange illiquidity.
“On a quarterly basis, the total value of transactions at NGX printed at N676.54 billion in Q1-21 (Q1-20: N626.87 billion). We maintain our expectation of weak domestic and foreign investors’ participation on the local bourse in the near term due to sustained rise in yields in the fixed income space and lingering liquidity constraints in the FX market”, they said.