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Foreign investors’ demand for Nigerian stocks increases to N38.98 billion

BY David Oladele

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Nigerian Stock Exchange - NSE 1
Nigerian Stock Exchange - NSE

The Nigerian Stock Exchange (NSE) has reported that the demand for local stocks by foreign investors between July and August 2020, increased by 12.69%, from N34.59 billion (about $89.0 million) recorded in July 2020 to N38.98 billion (about $100.81 million) as of August 2020.

The performance of the current month when compared to the performance in August 2019 (N121.99billion) revealed that total transactions decreased by 22.58%.

Source: NSE

Source: NSE

In August 2020, the total by value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 18% as shown in figure 1 below.

The report showed that both Retail and Institutional investors of the domestic market recorded a decline, however, the magnitude differs.

According to the report, while retail transactions decreased by 18.22%, from N32.54billion to N26.61billion in the period under review.

The shares of institutional investors in the domestic market decreased by 20.01%, from N36.08billion in July 2020 to N28.86billion in August 2020.

Source: NSE

Source: NSE

Over a thirteen-year period, domestic transactions decreased by 72.30% from N3.556t in 2007 to N985bn in 2019 whilst foreign transactions increased by 53.08% from N616bn to N943bn over the same period.

Total domestic transactions accounted for about 51% of the total transactions carried out in 2019, whilst foreign transactions accounted for about 49% of the total transactions in the same period.

Source: NSE

Source: NSE

The actual performance referenced 2020A (2020 Actual) shows those total foreign transactions carried out year till date (YTD) is about N470.20billion whilst total domestic transactions YTD is about N731.00billion.

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