Economy

Domestic, foreign transactions in stocks rise 61% to N1.5trn

The total value of domestic and foreign transactions on Nigerian Exchange Limited (NGX) in the first five months of this year, January to May 2022 amounted to N1.506 trillion, representing 61.3 percent increase over the N933.65 billion recorded in the corresponding period of 2021.

The Domestic and Foreign Portfolio Investment (FPI) in May 2022 report released by NGX Regulation Limited captured these transactions as well as trading figures from market operators.

Meanwhile, domestic investors have continued to dominate the market despite rising inflation and volatility in the foreign exchange market which remained key drivers of the FPIs.

Details of the trading profile show that FPI stood at N201.29 billion, accounting for about 13.37 per cent of the total transactions carried out within the period, while domestic transactions amounted to N1.3 trillion, representing 86.6 per cent of the total transaction.

Details of the domestic transactions showed that retail transactions pulled N408 billion in investment, while institutional investors staked N896.21 billion during the period.

Capital market analysts stated that local investors are taking advantage of the low prices of stocks in NGX to increase their investments. They explained that local investors are increasing their stake in the equities market due to the attractive dividend yield in the market and because of the low yield environment in the fixed income market.

They also observed that the development is good for the local bourse, saying that it would restore credibility and stability to the market, which was hitherto marred by volatility occasioned by the activities of foreign investors.

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