Despite the impact of the COVID-19 pandemic on global financial markets, domestic participation on the floor of the Nigerian Stock Exchange (NSE) for the month of June 2020 rose by 56 per cent compared to 44 per cent participation from foreign investors.
This was even as the total transactions at the nation’s bourse increased by 8.17 per cent from N119.15billion (about $307.32 million) in May 2020 to N128.88billion (about $333.25 million) in June 2020.
According to the NSE’s Domestic & Foreign Portfolio Investment (FPI) report, FPIs rose to N56.34 billion in June 2020 as against N35.24 billion recorded in May 2020 while inflows improved from N18.43 billion in May 2020 to N25.27 billion. The FPI report, coordinated by the NSE, included transactions from nearly all custodians and capital market operators and it is widely regarded as a credible measure of FPI trend. The report uses two key indicators-inflow and outflow, to gauge foreign investors’ mood and participation in the stock market, as a barometer for the economy.
Analysis of the total transactions executed between the current and prior month (May 2020) revealed that total domestic transactions decreased by 13.55 per cent from N83.91billion in May to N72.54 billion in June 2020.
The report also indicated 6.32 percentage points decline in the overall participation in the Nigerian capital market, accounting for 39.53 per cent of total transactions by first half 2020 as against 45.84 per cent in first half 2019.