Portfolio investment records fantastic half-year growth at NGX as turnover hits N1.66trn

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BY BAMIDELE FAMOOFO

Uba Group

Total portfolio investment in the Nigerian equities market in six months (half year) ended June 30, 2022 stood at N1.66 trillion. It recorded a growth of N627.63 billion from N1.03 trillion as at June 30, 2021, representing a year on year increase of 60.7 percent.

A portfolio investment is ownership of a stock, bond, or other financial asset with the expectation that it will earn a return or grow in value over time, or both. It entails passive or hands-off ownership of assets as opposed to direct investment, which would involve an active management role.

Domestic investors (retail and institutional) remain a major driver of the performance of portfolio investment in the local bourse in the review period, contributing 85.35 percent of turnover value.

Data sourced from the Nigerian Exchange Limited puts total domestic portfolio investment at about N1.42 trillion as against N243.48 billion injected into the equities market by foreign portfolio investors.

Domestic portfolio investment on a year on year basis grew by 74.6 percent or N606.11 billion, from N821.46 billion as at June 30, 2021 to N1.42 trillion in half year 2022.

Domestic investors’ participation in the market received a boost in six months of 2022 compared to the same period in 2021. Year on year, domestic retail investors increased their investment by 34.9 percent or N116.85 billion, from N335.29 billion to N452.14 billion.

Domestic institutional investors were more aggressive as their portfolio grew by 102.5 percent or N489.26 billion, from N477.17 billion to N966.43 billion YTD as at June 30, 2022.

Foreign portfolio investment year to date (January-June) accounted for 14.65 percent of total portfolio investment in the stock market, recording a year on year increase of 9.7 percent or N21.52 billion. Inflow of foreign portfolio investment increased by 14.5 percent year on year, from N105.24 billion a year to date (June 2021) to N120.51 billion year to date (June 2022). On the flipside, outflow increased by 5.4 percent, from N116.72 billion YTD (June 2021) to N122.97 billion YTD (June 2022).

“As at 31 March 2022, total transactions at the nation’s bourse increased by 0.93 percent from N183.56 billion (about $441.61million) in February 2022 to N185.26 billion (about $445.25million) in March 2022”

Q2 performance review

As at 30 June 2022, total transactions at the nation’s bourse decreased by 74.23 percent from N607.45billion (about $1.45billion) in May 2022 to N156.52billion (about $371.53million) in June 2022.

The performance in June 2022, when compared to the performance in June 2021 (N100.77 billion) revealed that total transactions increased by 55.32 percent.

In June 2022, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by 46 percent year to date.

A further analysis of the total transactions executed between June and prior month (May 2022) revealed that total domestic transactions decreased significantly by 72.16 percent from N562.15billion in May to N114.33billion in June 2022.

Similarly, total foreign transactions decreased by 6.87 percent from N45.30billion (about $108.02million) to N42.19billion (about $100.15million) between May 2022 and June 2022.

Institutional investors outperformed retail investors by 22 percent. A comparison of domestic transactions in June and prior month (May 2022) revealed that retail transactions decreased by 40.54 percent from N74.19billion in May 2022 to N44.11billion in June 2022.

Similarly, the institutional composition of the domestic market decreased by 85.61 percent from N487.96billion in May 2022 to N70.22billion in June 2022.

Total transactions at the nation’s bourse as at April 30 2022; increased by 11.13 percent from N185.26 billion (about $445.25million) in March 2022 to N205.88 billion (about $494.26million) in April 2022.

“CBN"

The performance of the current month when compared to the performance in April 2021 (N159.93 billion) revealed that total transactions increased by 28.73 percent. In April 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 74 percent.

A further analysis of the total transactions executed between the current and prior month (March 2022) revealed that total domestic transactions increased by 24.96 percent from N143.09billion in March to N178.80 billion in April 2022. In contrast, total foreign transactions decreased by 35.78 percent from N42.17 billion (about $101.36million) to N27.08billion (about $65.01million) between March 2022 and April 2022. Further analysis showed that Institutional Investors outperformed Retail Investors by 24 percent.

A comparison of domestic transactions in the current and prior month (March 2022) revealed that retail transactions increased by 12.56 percent from N60.61billion in March 2022 to N68.22billion in April 2022. Similarly, the institutional composition of the domestic market increased by 34.07 percent from N82.48 billion in March 2022 to N110.58 billion in April 2022.

The transaction data for 2022 shows that total domestic transactions are circa N742.09billion, whilst total foreign transactions are circa N156.09billion.

Q1 performance review

As at 31 March 2022, total transactions at the nation’s bourse increased by 0.93 percent from N183.56 billion (about $441.61million) in February 2022 to N185.26 billion (about $445.25million) in March 2022.

The performance of the current month when compared to the performance in March 2021 (N228.49billion) revealed that total transactions decreased by 18.92 percent. In March 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 54 percent.

A further analysis of the total transactions executed between the current and prior month (February 2022) revealed that total domestic transactions increased by 3.59 percent from N138.13billion in February to N143.09billion in March 2022.

In contrast, total foreign transactions decreased by 7.17 percent from N45.43billion (about $109.30million) to N42.17billion (about $101.36million) between February 2022 and March 2022.

“Over a 15-year period, domestic transactions decreased by 58.80 percent from N3.56 trillion in 2007 to N 1.465 trillion in 2021 whilst foreign transactions also decreased by 29.38 percent from N616 Billion to N435 Billion over the same period”

Institutional Investors outperformed Retail Investors by 16 percent. A comparison of domestic transactions in the current and prior month (February 2022) revealed that retail transactions decreased by 1.27 percent from N61.39 billion in February 2022 to N60.61 billion in March 2022.

However, the institutional composition of the domestic market increased by 7.48 percent from N76.74billion in February 2022 to N82.48billion in March 2022. The transaction data for 2022 shows that total domestic transactions are circa N563.29billion, whilst total foreign transactions are circa N129.01billion.

Total transactions at the nation’s bourse as at February 28, 2022; decreased by 43.24 percent from N323.38 billion (about $777.32million) in January 2022 to N183.56billion (about $441.61million) in February 2022. The performance of the current month when compared to the performance in February 2021 (N215.58 billion) revealed that total transactions decreased by 14.85 percent.

In February 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 50.0 percent.

A further analysis of the total transactions executed between the current and prior month (January 2022) revealed that total domestic transactions decreased by 51.02 percent from N282.07billion in January to N138.13billion in February 2022.

In contrast, total foreign transactions increased by 9.97 percent from N41.31billion (about $99.30million) to N45.43billion (about $109.30million) between January 2022 and February 2022.

Institutional Investors outperformed Retail Investors by 11 percent. A comparison of domestic transactions in the current and prior month (January 2022) revealed that retail transactions decreased by 35.76 percent from N95.56billion in January 2022 to N61.39billion in February 2022.

Similarly, the institutional composition of the domestic market decreased by 58.85 percent from N186.51billion in January 2022 to N76.74billion in February 2022. The transaction data for 2022 shows that total domestic transactions are about N420.20billion, whilst total foreign transactions are about N86.84billion.

As at 31 January 2022, total transactions at the nation’s bourse increased by 104.33 percent, from N158.26billion (about $363.81million) in December 2021 to N323.38billion (about $777.32million) in January 2022. The performance of the current month when compared to the performance in January 2021 (N232.46 billion) revealed that total transactions increased by 39.11 percent. In January 2022, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 74 percent.

A further analysis of the total transactions executed between the current and prior month (December 2021) revealed that total domestic transactions increased by 129.44 percent from N122.94billion in December to N282.07billion in January 2022. Similarly, total foreign transactions increased by 16.96 percent from N35.32billion (about $81.20million) to N41.31billion (about $99.30million) between December 2021 and January 2022. Institutional Investors outperformed Retail Investors by 32 percent.

A comparison of domestic transactions in the current and prior month (December 2021) revealed that retail transactions increased by 153.21 percent from N37.74billion in December 2021 to N95.56billion in January 2022.

However, the institutional composition of the domestic market increased by 118.91 percent from N85.20billion in December 2021 to N186.51billion in January 2022.

The transaction data for 2022 shows that total domestic transactions are circa N282.07billion, whilst total foreign transactions are circa N41.31billion.

Historical analysis

Over a 15-year period, domestic transactions decreased by 58.80 percent from N3.56 trillion in 2007 to N 1.465 trillion in 2021 whilst foreign transactions also decreased by 29.38 percent from N616 Billion to N435 Billion over the same period.

Total domestic transactions accounted for about 77 percent of the total transactions carried out in 2021, whilst foreign transactions accounted for about 23 percent of the total transactions in the same period.