Total transactions at the Nigerian equities market have risen to N2.42 trillion on the back of intensive bargain-hunting for Nigerian equities.
A report by the Nigerian Exchange (NGX) obtained yesterday indicated that the equities market witnessed additional transactions worth N530 billion to hit N2.42 trillion in the first eight months of this year.
The trading report for the eight-month period ended August 31, showed that total transactions rose to N2.42 trillion by August as against N1.89 trillion recorded in the first eight months of 2022, representing an increase of 28.04 per cent or N530 billion.
The report included transactions by foreign and domestic investors and it is used as a measure of the mood of the investing public, within a period.
A month-on-month breakdown showed that foreign portfolio inflows increased by 45.9 per cent to N13.79 billion in August 2023 as against N9.45 billion recorded in July 2023. Foreign outflows dropped from N31.09 billion in July 2023 to N23.37 billion in August 2023.
Transactions attributed to domestic investors rose from N1.585 trillion in forts eight months of 2022 to N2.19 trillion by August 2023. Foreign transactions dropped from N301.37 billion in 2022 to N222.78 billion in 2023, due largely to significant decline in foreign transactions in the early months of the year.
The overall performance of the equities market this year has largely been influenced by what the market described as “post-inauguration rally”, referencing the positive sentiments that have trailed the pro-market reforms of the Bola Tinubu administration.
The NGX had stated that experts’ opinions on the strong performance of the market were that the bullish trend was due to “a combination of factors, including investor sentiment influenced by macroeconomic developments such as the formation and swearing-in of the economic cabinet by President Bola Tinubu”.
The NGX had also attributed the market performance to the “audacious macroeconomic reforms under the new administration” of Tinubu.
According to the NGX, market operators were of the view that “the policies of the new administration under President Bola Tinubu” had “led to the rise in the fortunes of investors”.
Transactions at the NGX had risen by 22 per cent to cross the N2 trillion threshold to N2.15 trillion in the first seven months of this year, the best performance in 10 years, since 2014 that the NGX started publication of its monthly foreign portfolio investment report, a general report that captures transactions by local and foreign investors at the Nigerian market.
The report, for the period ended July 31, 2023, showed that total transactions for the seven-month period increased to N2.154 trillion in 2023 as against N1.763 trillion recorded in the comparable seven-month period of 2022.
Total transactions for the first four months of 2023 stood at N721.44 billion, slightly above N702.98 billion recorded in July 2023 alone. Total transactions for the three-month period of May to July 2023 stood at N1.433 trillion, about 99 per cent above total transactions in the first four months and 66.53 per cent of total transactions so far this year.
The report also showed that foreign investors appeared to have taken initial note of the reforms, although several analysts expected foreign investors to tarry awhile in the usual “wait-and-see” attitude of measuring the stability of a policy direction.
A report on foreign portfolio investments (FPIs) by the NGX had shown an all-positive mark for the Nigerian investment market with increased transactions by foreign and domestic investors in second quarter 2023. Foreign portfolio investors were also retaining more funds in the Nigerian market, reversing the negative situation in the previous months when there were more outflows than inflows.
Total foreign transactions rose by 70.1 per cent in the second quarter 2023 as against first quarter 2023, driven by 197.5 per cent increase in inflows. FPIs net status- the difference between outflows and inflows, changed from a deficit of 49 per cent in first quarter 2023 to a surplus of 43.9 per cent in second quarter 2023.
The performance in the second quarter was driven largely by a dramatic recovery in foreign interest in May, which continued in June; supporting equally ecstatic performance by domestic investors.
The report indicated retail domestic transactions increased by 40.70 per cent from N88.50 billion in May to N124.52 billion in June 2023, showing that more individual Nigerians were optimistic about the economy despite the immediate challenges that greeted major policy changes. Institutional composition of the domestic market increased by 19.9 per cent from N197.26 billion in May 2023 to N236.49 billion in June 2023.
Total FPIs transactions rose from N53.71 billion in first quarter to N91.37 billion in the second quarter. FPIs inflows tripled from N18.12 billion in first quarter to N53.9 billion in the second quarter. Total FPIs outflows, which had stood at N35.59 billion against inflow of N18.12 billion in first quarter, was less significant at N37.47 billion against an inflow of N53.9 billion in the second quarter.
a tracked by The Nation’s Market Intelligence at the weekend indicated that African stock markets dominated the top five global market returns and were the largest continental bloc within the world’s top biggest returns so far this year.
The data included the most prominent stock markets and cut across the various tiers of advanced, emerging and frontier markets. These included United States, United Kingdom, Germany, Japan, France, Hong Kong, Russia, India, Brazil, China, Thailand, Turkey, Saudi Arabia, Qatar and United Arab Emirates (UAE). African markets included Nigeria, South Africa, Kenya, Morocco, Ghana, Egypt and Mauritius.
Turkey’s BIST 100 Index indicated highest return of 45.6 per cent. Egypt led the African group with the EGX 30 Index returning 37.6 per cent so far this year, the second highest return among tracked global stock markets. Nigeria placed third on the global list with average return of 31.4 per cent. Ghana’s GSE Composite Index indicated average return of 29.6 per cent. United States’ Nasdaq Index posted average return of 26.9 per cent, but this was moderated by average return of 13.2 per cent by the S & P 500 Index. Japan’s Nikkei 225 Index placed sixth with 24.2 per cent.
Other top-10 returns included Germany’s Xetra DAX, 11.9 per cent; France’s CAC 40 Index, 11.2 per cent; Morocco’s Casablanca Masi Index, 9.8 per cent and India’s BSE Sens Index, which posted average return of 8.5 per cent.
With the exception of Kenya, which posted negative return of -9.4 per cent; the two other African stock markets- Mauritius and South Africa recorded modest return of 1.8 per cent and 0.8 per cent respectively.
Other global markets with year-to-date positive returns included United Kingdom’s FTSE All Share Index, 2.7 per cent; Brazil’s Ibovespa, 6.4 per cent; Russia’s RTS Index, 2.8 per cent; China’s Shanghai Composite Index, 1.4 per cent and Saudi Arabia’s Tadawul All Share Index, with average year-to-date return of 4.5 per cent.
However, Hong Kong’s Hang Seng, Thailand’s SET Index, UAE’s ADX General Index and Qatar’s DSM 20 Index reported negative returns of -8.7 per cent; -8.8 per cent; -3.5 per cent and -3.4 per cent respectively.