SAT. 18 FEB, 2023-theGBJournal| According to the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions on the local bourse increased by 34.8% m/m to N140.70 billion in December (November: N104.38 billion).
Analysing the breakdown provided, we highlight that domestic transactions (89.2% of gross transactions) rose by 39.5% m/m to N125.49 billion but domestic investors remain net sellers of equities for the ninth consecutive month.
Likewise, foreign transactions (10.8% of gross transactions) advanced by 5.4% m/m to N15.21 billion, although the level of transactions remained significantly below the 2022FY monthly average (NGN31.59 billion) on account of lingering FX liquidity constraints, heightened global uncertainties, and high global interest rates.
In the short to medium term, we expect domestic investors to continue to dominate the market, although election uncertainties and prospects for higher FI yields may constrain buying activities.
Also, FPIs who have exhibited a lacklustre interest in domestic equities are likely to remain on the sidelines due to upcoming elections, sustained FX liquidity challenges, and tightening global financing conditions.
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