Domestic and Foreign Portfolio Participation in Equity Trading

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Ralph Damian Lyons
5 years ago
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1 Domestic and Foreign Portfolio Participation in Equity Trading August 213 On a monthly basis, the Exchange polls trading figures from major custodians and market operators on their foreign portfolio investments (FPI). The table below shows an analysis of transactions on The Exchange between January and August 213. Table 1: Monthly Analysis of on The Exchange for the Period Ended 31 August 213 Period N' Billion Foreign Inflow N'Billion Foreign outflow N'Billion Foreign transactions N' Billion Domestic transactions N' Billion Foreign % Domestic % January % 63.11% February % 6.35% March % 47.24% April % 35.52% May % 51.32% June % 48.87% July % 37.47% August % 47.74% Jan August 213 1, % 49.13% The FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (Equities only). The table illustrates that the FPI transactions which started at 36.9% at the beginning of the year, increased to 52.3% at the end of August 213 representing an increase of 15.4%. Domestic transactions on the other hand decreased from 63.1% at the beginning of the year to 47.7% at the end of August representing a reduction of 15.4%. The graphs in page 2 show the trend between January and August 213 and illustrate the movements in both the domestic and foreign transactions at The Exchange in 213.

Fig 1:Foreign/Domestic Trend in 213 16 14 12 1 8 6 4 2 January February March April May June July August 61.46 75.97 8.14 122.97 91.86 15.72 93.71 7.88 15.14 115.63 71.76 67.

2 Fig 1:Foreign/Domestic Trend in January February March April May June July August Fig 2:Foreign/Dom: Jan - Aug The analysis on page 3 captures the domestic composition of transactions on The Exchange in August 213.

Table 2: Analysis of Domestic on The Exchange (June August 213) Domestic (N Billion) Retail (N Billion) Institutional (N Billion) % Retail % Institutional June 143.59 47.81 95.78 33.3 66.7 July 56.

3 Table 2: Analysis of Domestic on The Exchange (June August 213) Domestic (N Billion) Retail (N Billion) Institutional (N Billion) % Retail % Institutional June July August Fig 3:Retail/Institutional: June - Aug June July August Retail (N Billion) Institutional (N Billion) Note: The above information on the retail and institutional components of the total domestic transactions in July is based on data obtained from about 77% of Active Dealing Members of The Exchange. The following analysis captures FPI historical data and trends between 27 and 212. Table 3: Flow of Foreign Portfolio Investments (FPI) on the Nigerian Stock Exchange Year Inflow (N Billion) Outflow (N Billion) (N Billion)

Graphical comparisons of the inflows and outflows between 27 and 212 are as shown below: Fig 4: Foreign Inflow/Outflow Trend 7 6 5 4 3 2 1 27 28 29 21 211 212 Inflow (N Billion) 256 154 229 382

4 Graphical comparisons of the inflows and outflows between 27 and 212 are as shown below: Fig 4: Foreign Inflow/Outflow Trend Inflow (N Billion) Outflow (N Billion) Inflow (N Billion) Outflow (N Billion) Fig 5: Inflow/Outflow (27 to 212) Inflow (N Billion) Outflow (N Billion)

5 A comparison of the total foreign transactions with domestic transactions between 27 and 212 on the Nigerian Stock Exchange is as shown in table 4 below: Table 4: Comparison of Foreign with total Domestic YEAR on the Exchange (N Billion) Foreign (N Billion) Domestic (N Billion) Foreign (%) Domestic (%) 27 4, , , , , , , , , The table shows that total FPI transactions, which accounted for 14.8% of total transactions in 27 consistently increased over the years to 66.8% in 211 (An increase of 52% over the 4 year period). However, this dropped to 61.4% in 212. Domestic transactions on the other hand peaked at 85.2% in 27 but dropped significantly to 33.2% of total transactions in 211 (A sharp reduction of 52% in the 4 year period). This subsequently increased to 38.6% in 212. The graphs below show the trend between 27 and 212. Fig 6: Foreign/Domestic Trend (27-212) ,556. 3, ,

6 Fig 7: Foreign/Domestic (27 to 212)

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