The Nigerian stock market, known as the Nigerian Exchange Limited (NGX), has experienced a surprising upswing in foreign investor interest during the first six months of 2023.
Despite grappling with soaring inflation, prolonged FX scarcity, and uncertainties surrounding the 2023 elections, total foreign transactions surged to an impressive N145.08 billion.
This surge in foreign investments is a ray of hope for the country’s equity trading as indicated by the recently released domestic and foreign portfolio investment reports for June 2023.
The earlier part of 2023 was marked by economic challenges, including high inflation rates and a scarcity of foreign exchange. However, changes made by the new administration in subsequent months witnessed a remarkable increase, more than doubling the total foreign transactions by mid-year.
In June 2023, total transactions at the bourse grew by 25.96% to N406.75 billion (approximately $537.87 million). This upswing is a stark contrast to the N156.52 billion recorded in June 2022, marking a staggering 159.87% increase in total transactions.
The report indicated that while total domestic transactions amounted to N1.306 trillion or 90%, foreign transactions’ value was N145.08 billion at the end of the review period.
Nevertheless, the surge in foreign investments shows a renewed interest in Nigeria’s equities market from global investors.
Institutional investors outperformed retail investors by 32% in the Nigerian stock market. The data from June 2023 revealed that retail transactions experienced a healthy increase of 40.70% from N88.50 billion in May to N124.52 billion.
Similarly, institutional transactions rose by 19.89% from N197.26 billion to N236.49 billion over the same period.
Over a period of 16 years, domestic transactions decreased by 45.30% from N3.556 trillion in 2007 to N1.945 trillion in 2022, while foreign transactions experienced a decline of 38.47%, from N616 billion to N379 billion over the same period.
The dominance of domestic transactions, accounting for approximately 84% of total transactions in 2022, indicates the importance of local investors in the market.
Bearish Sentiment Persists: Investors Lose N112 Billion on NGX
Nigerian Stock Market Dips as Weak Momentum Drains N39 Billion from Investors
Dr. Yemi Cardoso’s Nomination Boosts Confidence as Stock Investors Gained N264 Billion
The bullish momentum in the Nigerian Exchange Limited continued on Tuesday as investors pocketed N264 billion in profit following Monday’s gains of N263 billion.
Both the market capitalization and the All-Share Index, which gauge the movement of share prices for all listed companies surged by 0.71 percent to N37.413 trillion and 68,359.22 points, respectively.
This optimistic trading trend emerges as investors increasingly show confidence in the local market and the broader economy, fueled in part by the news of Dr. Yemi Cardoso’s nomination as the Governor of the Central Bank of Nigeria.
As Tuesday’s session drew to a close, the volume of shares traded experienced a significant uptick of 31.33 percent to 676.74 million. However, the number of deals declined by 8.35 percent to 7,659 while the total trade value decreased by 33.97 percent to N5.89 billion.
Market sentiments also leaned towards the bullish side, with 36 gainers outpacing the 27 losers.
Among the top-performing stocks that caught the attention of investors were:
- Berger Paints Plc, which surged by 9.95 percent to conclude the trading day at N11.60.
- Oando Plc, which recently released its audited results for 2021, saw a 9.92 percent increase, closing at N13.30.
- BUA Foods, which gained 6.32 percent to close at N196.70.
- PZ’s shares appreciated by 1.45 percent per unit, ending at N20.
- GTCO Plc stock increased in value by 0.43 percent, closing at N35.40.
On the flip side, the top losers included:
- SCOA Plc, witnessing a 10 percent depreciation in its shares, closing at N1.24.
- Unilever’s shares recorded an 8.28 percent drop, concluding at N13.30.
- United Bank for Africa Plc, which lost 1.96 percent in share value, closing at N17.50.
- FBN Holdings Plc, suffering a 1.69 percent decline, closing at N17.40.
- Accesscorp’s shares depreciated by 0.29 percent, closing trading at N17.40.
The Nigerian Exchange continues to display its resilience and attractiveness to investors, making it an exciting space to watch for potential opportunities and market trends.
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