SAT, JUNE 03 2023-theGBJournal |According to the Domestic and Foreign Portfolio Report of the Nigerian Exchange Group (NGX), total transactions in the domestic equities market recorded their first increase in three months, rising by 30.8% m/m to N191.21 billion in April (March: N146.22 billion).
The breakdown shows that the domestic investors were the primary drivers of the increase, as domestic transactions grew by 33.4% m/m to N182.74 billion (March: N137.03 billion) – its highest print in 11 months.
However, foreign transactions (-7.8% m/m to N8.47 billion | 4.4% of total transactions) declined to a new record low primarily due to the lingering FX liquidity constraints, weak macro narrative, elevated global interest rates, and heightened global uncertainties.
Analysts at Cordros Research say they expect domestic investors to continue to dominate the domestic equities market over the short-to-medium term, even as 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 elevated global uncertainties, sustained FX liquidity challenges, and tightening global financing conditions.
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