MON, 02 MAY, 2022-theGBJournal | According to the March Domestic & Foreign Portfolio Investment report of the Nigerian Exchange Limited (NGX), the total transaction value in the domestic equities market increased by 0.9% m/m to N185.26 billion in March (February: N183.56 billion).
The increase was mainly due to a 3.6% m/m increase in domestic transactions to NGN143.09 billion (77.2% of total transaction value). Meanwhile, foreign transactions declined by 7.2% m/m from N45.43 billion in February to N42.17 billion in March. We think the continued low participation from the foreign investors reflects the impact of FX liquidity constraints and lack of flexibility in the FX framework.
We highlight that the total transaction value at the local bourse printed N692.10 billion in Q1-22 (Q1-21: N676.53 billion). In the short to medium term, we expect domestic investors will continue to dominate market performance albeit, buying activities will be constrained by expectations about uptick in FI yields amid uncertainties associated with an election cycle.
Also, FPIs who have exhibited a lacklustre interest in domestic equities are likely to remain on the sidelines due to sustained FX liquidity challenges and interest rate hikes by central banks in advanced countries.
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