Domestic, Foreign Portfolio Transactions Nosedive To N346.23bn In April

Total domestic  and foreign portfolio transactions on the Nigerian Exchange Limited (NGX)  took a significant nosedive in April, 2024, plummeting to N346.23 billion, from N538.54 billion in March 2024.

This was revealed in the latest Domestic and Foreign Portfolio Investment Report of NGX. On a monthly basis, NGX polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

As of April 30, 2024, total transactions at the nation’s bourse decreased by 35.71 per cent from N538.54 billion in March 2024 to N346.23 billion in April 2024. The performance of the current month when compared to the performance in April 2023 (N191.21 billion) revealed that total transactions increased significantly by 81.07 per cent.

In April 2024, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 30 per cent. A further analysis of the total transactions executed between the current and prior month (March 2024) revealed that total domestic transactions decreased by 49.27 per cent from N444.28 billion in March to N225.40 billion in April 2024.

However, total foreign transactions increased by 28.19 per cent from N94.26 billion (about $70.83 million) to N120.83 billion (about $90.83 million) between March 2024 and April 2024.

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Also, Institutional Investors outperformed Retail Investors by 10 per cent. A comparison of domestic transactions in the current and prior month (March 2024) revealed that retail transactions decreased by 54.89 per cent from N223.37 billion in March to N100.77 billion in April 2024. Similarly, the institutional composition of the domestic market decreased by 43.58 per cent from N220.91 billion in March 2024 to N124.63 billion in April 2024.

Analysts at Cordros Securities Limited said, “we believe the prospect of FPIs returning to the market is a key factor to monitor in 2024. Foreign investors’ interest in the Nigerian equities market has remained weak due to difficulty in accessing and repatriating funds.

“We expect domestic investors to continue to dominate the domestic equities market over the short-to-medium term, even as higher fixed income (FI) yields may constrain buying activities.

“At the same time, we expect to see improvement in foreign participation over the medium term, even as foreign investors are likely to adopt a wait-and-see approach in the near term. Our expectation is hinged on the policy pronouncements and reforms by the current administration, undoing the policy mistakes of the past eight years.”