Foreign transactions on NGX soar by 113.94% in November

Foreign transactions on the Nigerian Exchange Limited surged by 113.94 percent to N71.37 billion ($75.76 million) in November from N33.36 billion in October, according to the Domestic and Foreign Portfolio Investment Report for November.

The COVID-19 pandemic had led to a decline in foreign participation in the Nigerian capital market in 2020.

As of September 2023, total domestic transactions were valued at N2.454 trillion, while total foreign transactions were worth about N258.02 billion.

The latest figure from the NGX showed that as of November, total foreign transactions had improved to N363 billion while total domestic transactions stood at N2.871 trillion.

Monthly, foreign transactions dropped in October to N33.36 billion from N35.24 billion. It however jumped to N71.37 billion in November.

“The total transactions executed between the current (November) and prior month (October 2023) revealed that total domestic transactions increased by 22.24 percent from N187.58 billion in October to N229.30 billion in November 2023.

“Similarly, total foreign transactions increased by 113.94 percent from N33.36 billion (about $36.83 million) to N71.37 billion (about $75.76 million) between October 2023 and November 2023,” the report disclosed.

A further breakdown of the foreign transactions showed that outflows outweigh inflows. As of November 2023, foreign inflow stood at N157.32 billion compared to N205.43 billion in outflow. The highest level of inflow was recorded in November at N34.77 billion and the lowest was in April which was N3.67 billion.

A look at the general market trend revealed that as of November 30, 2023, total transactions at the nation’s bourse increased by 34.08 per cent from N220.94bn (about $243.93 million) in October to N300.67 billion (about $319.15 million) in November 2023.  When compared to the figure for November 2022 (N104.28 billion), total transactions increased by 188.33 percent year-on-year.

In November 2023, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by about 52 percent.

Meanwhile, institutional investors outperformed retail investors by 20 percent. A comparison of domestic transactions in the current and prior month (October 2023) revealed that retail transactions increased by 7.30 percent from N86.46bn in October to N92.78 billion in November 2023.

Also, the institutional composition of the domestic market increased by 35.01 per cent from N101.12 billion in October 2023 to N136.52 billion in November 2023.

An historical trend of the market revealed that over 16 years, domestic transactions decreased by 45.30 percent from N3.556 trillion in 2007 to N1.945 trillion in 2022 whilst foreign transactions also decreased by 38.47 percent from N616 billion to N379 billion over the same period.

Total domestic transactions accounted for about 84 percent of the total transactions carried out in 2022, whilst foreign transactions accounted for about 16 percent of the total transactions in the same period.