…Domestic transactions (76.8% of gross transactions) increased by 17.9% m/m to NGN272.36 billion (May: NGN231.10 billion) supported by a 34.7% m/m and 0.4% m/m surge across institutional and retail investors, respectively
SUN JULY 28 2024-theGBJournal| Total transactions in the domestic equities market contracted marginally by 0.2% m/m to N354.55 billion in June (May: N355.38 billion), according to the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX).
We highlight that foreign investors primarily drove the decline in the review period, with foreign inflows (23.2% of market transactions) dropping by 33.9% m/m to N82.19 billion (May: NGN124.28 billion) as investors’ sentiments weakened primarily due to renewed FX liquidity constraints.
Meanwhile, domestic transactions (76.8% of gross transactions) increased by 17.9% m/m to NGN272.36 billion (May: NGN231.10 billion) supported by a 34.7% m/m and 0.4% m/m surge across institutional and retail investors, respectively.
While domestic investors are expected to continue contributing the bulk of total transaction value, analysts at Cordros Research think buying activities will be constrained by elevated yields in the fixed-income market following the MPC’s tight monetary policy stance.
Also, FPIs who have exhibited a lackluster interest in domestic equities are likely to remain on the sidelines due to sustained FX liquidity challenges and elevated interest rates in advanced countries.
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