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Nigeria Stock Market: Domestic Transactions Fall by N18.48bn in One Month

Domestic transactions in Nigeria’s stock market fell from N59.21bn to N40.73bn between December 2015 and January 2016, the Nigerian Stock Exchanged revealed in a report on its website.

Total transactions at the nation’s bourse decreased by 23.93 per cent from N110.56bn recorded in December 2015 to N84.1bn in January 2016.

In comparison with the same period in 2015, total transactions decreased by 55.67 per cent from the N189.72bn recorded in January 2015.

Domestic investors conceded about 3.14 per cent of trading to foreign investors as domestic transactions decreased from 53.55 per cent in December 2015 to 48.43 per cent in January 2016 while Foreign Portfolio Investment transactions increased from 46.45 per cent to 51.57 per cent over the same period.

Monthly foreign outflows outpaced inflows found to be consistent with the same period in 2015.

However, there was a 23.17 per cent decrease in foreign outflows from N34.31bn in December 2015 to N26.36bn in 2016.

Also, foreign inflows decreased by 0.18 per cent from N17.04bn in December 2015 to N17.01bn in January 2016

In January this year, United Capital Plc had stressed that Nigeria equities were in dire need of increased local participation given the prevailing woes in the country’s capital market.

The dominance of foreign participation in the last four years had led to the market’s seamless reaction to global shocks, the company said.

In its Nigerian 2016 outlook report, the firm explained that market volatility and sell pressure had been majorly driven by capital flight, buttressing the need for increased local participation to insulate the domestic market from external shocks and currency volatility.

At low stock prices, it said dividend yields for value stocks were becoming increasingly attractive.

“Ordinarily, this should trigger buy-in by local institutional investors, thus moderating the negative impact of foreign portfolio investors’ reversal. However, the challenging business environment might constrain company’s dividend payout for the 2016 financial year, especially the banks,” it noted.

The stake of indigenous investors in the NSE had dropped by N256.07bn within 12 months (2014 to 2015), according to the data released by the Exchange in January this year.

The NSE total domestic transactions were said to have decreased by 22.53 per cent from N1.13663tn recorded at the end of 2014 to N880.56bn at the end of 2015.

The declining trend prevailed ahead of mid-January with equity investors in the country’s capital market losing N804tn of their investment worth in the first seven trading days on the floor of the Exchange.

Total transactions at the nation’s bourse decreased by 41.72 per cent from N189.72bn recorded in January 2015 to N110.56bn (about $0.56bn) in December 2015. This represents a decrease of13.49 per cent from N127.8bn recorded in November.

The total domestic transactions were said to have increased by 7.26 per cent from N55.2bn   in November to N59.21b in December 2015. In comparison with December 2014, the total domestic transactions decreased from N133.6bn to N59.21bn.

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