Domestic and Foreign Portfolio Investors (FPIs) transactions on the Nigerian Exchange Limited (NGX) declined by nearly 31 percent to N1.04 trillion in the year to May 2023, compared with N1.51 trillion in the corresponding period of last year, according to data from the local bourse.
From January to May this year, domestic investors, comprising retail and institutional investors, invested N945.02 billion in the market, representing a decline of 28 percent compared with N1.3 trillion in the corresponding period in 2022.
Also, foreign investors’ participation in the stock market dipped by 51 percent to N99.34 billion against N201.29 billion posted in the first five months of 2022.
However, investors’ confidence was restored in May 2023 after the swearing in of the new president, Bola Tinubu, who kicked off major reforms in the economy, leading to the removal of fuel subsidies and abolishing multiple exchange rates.
Subsequently, the market hit its biggest single-day gain in two years, rising by 5.23 percent on May 29 as investors reacted positively to President Tinubu’s “no more fuel subsidies and immediate unification of exchange rates” comments.
Tinubu had also stated that his administration would be targeting higher Gross Domestic Product (GDP) growth, creating jobs, working towards a unified exchange rate, and ensuring that investors and foreign businesses repatriate their hard-earned dividends and profits home.
This resulted in a huge bounce, as the total value of transactions executed by domestic investors outperformed transactions executed by foreign Investors by 76 percent.
In May 2023, the total transactions rose to N322.92 billion against N191.21 billion in the previous trading month, representing a 68.88 percent increase.
Further analysis of the market total transactions showed an increase of 56.37 percent in May, with N285.76 billion in May compared with N182.74 billion in April.
Similarly, total foreign transactions increased significantly by 338.72 percent to N37.16 billion (about $79.88 million) in May, compared with N8.47 billion (about $18.31 million) in the previous month.
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