Domestic investors’ portfolio transactions on the Nigerian Exchange Limited (NGX) dropped to N225.40 billion in the month of August, 2023.
This was contained in the NGX’s Domestic and Foreign Portfolio Investment Report for August. The total domestic transactions decreased by 65.97 per cent from N662.44 billion in July to N225.40 billion in August 2023.
Further analysis showed that on a monthly basis, as at August 31, 2023, total transactions at the nation’s bourse decreased by 62.65 per cent from N702.98 billion in July 5, 2023 to N262.56 billion in August 6, 2023.
The performance of the current month when compared to the performance in August 2022 stood at N123.97billion revealed that total transactions increased by 111.79 per cent.
In August 2023, the total value of transactions executed by Domestic Investors outperformed transactions executed by foreign investors by circa 72 per cent. Also, total foreign transactions decreased marginally by 8.34 per cent from N40.54 billion to N37.16 billion between July 2023 and August 2023.
Analysis of domestic transactions showed that institutional investors outperformed retail investors by 14 per cent. Retail transactions decreased by 57.76 per cent from N229.95 billion in July to N97.13 billion in August 2023.
Similarly, the institutional composition of the domestic market decreased by 70.34 per cent from N432.49 billion in July 2023 to N128.27 billion in August 2023.
Meanwhile, investors’ confidence in Nigeria’s stock market remained strong as equities investors gained N1.4 trillion in August, 2023, despite concerns around the soaring inflation, interest rate hikes and weak macroeconomic indices.
The bullish trend can be attributed to investors’ jostling for low, medium, and high capitalised stocks across some major sectors amid favourable policies introduced by President Bola Tinubu’s new administration such as the removal of fuel subsidies, unification of exchange rate, investors strategically positioning themselves and taking advantage of the recent record earnings posted by quoted firms and the recent formation of the country’s economic cabinet and executives.
Interestingly, the market traded in mixed sentiments during the month under review.
Reacting to the development, market analysts described the performance as mixed- positive signs of domestic inflow growth and optimism driven by reforms but also a significant decline in overall market transactions in August 2023 compared to the previous month.