Why NSE’s transactions declined by 8.5% to ₦94.45bn in August

NSE market

By Motolani Oseni

The equities market total transactions on the Nigerian Stock Exchange (NSE) declined by 8.49 per cent to N94.45 billion in August 2020, the latest NSE’s Domestic & Foreign Portfolio Investment Report has revealed.

The Exchange report showed that total transactions dipped 8.49 per cent when compared with N103.21 billion recorded in July.

The total value of transactions executed by domestic investors during the period under review outperformed transactions executed by foreign investors by 18 per cent.

Consequently, domestic investors accounted for 59 per cent of the total transactions, while foreign investors accounted for 41 per cent.

An analysis of the total transactions revealed that total domestic transactions decreased by 19.16 per cent from N68.62 billion in July to N55.47 billion in August.

It said that total foreign transactions increased by 12.69 per cent to N38.98 billion from N34.59 billion in July. The report said that institutional investors outperformed retail investors by four per cent, accounting for 52 per cent compared with 48 per cent posted by retail investors.

“A comparison of domestic transactions in the current and prior month revealed that retail transactions decreased by 18.22% from N32.54 billion in July 2020 to N26.61 billion in August 2020.

“The institutional composition of the domestic market decreased by 20.01 per cent from N36.08 billion in July 2020 to N28.86 billion in August 2020,” it said.

Further breakdown of the report indicated that foreign inflow stood at N17.66 billion in August against N13.70 billion in July.

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Conversely, foreign outflow rose to N21.32 billion in August from N20.89 billion achieved in July.

Over a 13 year period, domestic transactions decreased by 72.30 per cent from N3.556 trillion in 2007 to N985 billion in 2019 whilst foreign transactions increased by 53.08 per cent from N616 billion to N943 billion over the same period.

“Total domestic transactions accounted for about 51 per cent of the total transactions carried out in 2019,” said the report.

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