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Equities Market: Domestic, Foreign Transactions Hit N1.6trn In H1

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The domestic and foreign investors’ transaction on the Nigerian Stock Exchange (NSE) amounted to N1.597 trillion in the first half of the year.

New report by the NSE on domestic and foreign portfolio participation in equities trading for June 2018 showed that the cumulative transactions from January to June, 2018 increased by 70.78 per cent from N935.26 billion recorded in 2017 to N1.597 trillion in 2018.

On a monthly basis, the NSE polls trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows.

Also, in the first half of the year, total foreign transaction stood at N799.70 billion higher than total transaction of domestic at N797.47 billion. Total foreign inflows for period stood at N380.65 billion, while outflow stood at N419.06 billion.

Further analysis showed that total transactions at the nation’s bourse declined to N187.78 billion in June 2018 from N318.27 billion in May 2018, foreign transactions fell to N102.41 billion from N192.95 billion, constituting 54.54 per cent down from 60.62 per cent of the total trade, while domestic transactions also decreased to N85.37 billion from N125.32 billion.

Foreign portfolio outflow fell month-on-month (m-o-m) by 58.40 per cent to N54.45 billion in June 2018 while foreign portfolio inflow declined m-o-m by 22.72 per cent to N47.96 billion in June 2018. On the domestic front, institutional transactions declined m-o-m by 38.89 per cent to N56.24 billion in June 2018, constituting 65.88 per cent from 73.44 per cent of the total domestic transactions while the retail transactions declined m-o-m by 12.53 per cent to N29.12 billion in June 2018.

Cowry Asset Management noted that in another development, the Monthly Business Expectations survey report for July 2018, released by the Central Bank of Nigeria (CBN) showed that business owners were more optimistic on Nigeria’s macro-economic outlook for the month of August 2018 than in the month of July 2018.

The overall business confidence index for July and outlook for August were positive but declined to 13.6 points from 34.7 points in June and 58.7 points from 64.9 points respectively; reflective of the decreased volume of total order book in July and the expected slight decrease in volume of business activity in August as their index points moderated to 3.5 points from 16.4 points and 66.2 points from 66.7 points respectively.

The survey according to Cowry revealed that amongst other conditions, unclear economic laws, insufficient demand and unfavorable political climate constrained business activity in the month of July 2018 while the relative stability in exchange rate witnessed in July 2018 is expected to improve in August 2018.

Cowry Asset Management said, “we agree with the lower optimism expressed by private businesses on the country’s macro-economic in the short term as politics gets priority over economic matters ahead of the 2019 general elections. More so, the strain in working capital occasioned by limited access to credit would stifle business performance.

“We opined that the domestic institutional investors, especially the pension fund administrators, following implementation of the pension multi-fund structure in July, have continued to demonstrate the willingness and capacity to buy the shares dumped by foreign portfolio investors as they become cheaper despite the political uncertainty.”



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