The total amount of transactions on the Nigerian Exchange Limited (NGX) experienced a substantial surge, reaching N322.92 billion in May.
This notable increase of 68.88% compared to the previous trading month, where transactions amounted to N191.21 billion, signifies a positive shift in the country’s capital market.
The Domestic and Foreign Portfolio Investment Report of Nigerian Exchange Limited for May 2023 highlighted the challenges faced by the Nigerian economy, such as prolonged foreign exchange scarcity and inflation, which had taken a toll on the capital market, serving as an economic barometer.
However, on May 29, the securities market witnessed a remarkable single-day gain, soaring by an impressive 5.23%.
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The surge can be attributed to the positive response from investors to President Bola Tinubu’s announcement regarding the elimination of fuel subsidies and immediate exchange rate unification.
Tinubu also expressed his administration’s commitment to achieving higher Gross Domestic Product (GDP) growth, job creation, unified exchange rates, and the repatriation of dividends and profits for foreign investors and businesses.
This positive development resulted in a significant bounce, with domestic investors outperforming their foreign counterparts by executing transactions valued at 76% higher.
The total value of domestic transactions rose by 56.37% from N182.74 billion in April to N285.76 billion in May 2023.
Similarly, total foreign transactions experienced a substantial increase of 338.72% from N8.47 billion (approximately $18.31 million) to N37.16 billion (approximately $79.88 million) during the same period.
Analyzing the data over a sixteen-year period, it is evident that domestic transactions have faced a decline of 45.30% from N3.556 trillion in 2007 to N1.945 trillion in 2022.
Similarly, foreign transactions decreased by 38.47% from N616 billion to N379 billion over the same timeframe.
Furthermore, the report reveals that total domestic transactions in May 2023 amounted to N945.02 billion, while total foreign transactions stood at N99.34 billion.
Additionally, institutional investors outperformed retail investors by 38%, and a comparison between April and May 2023 showcased a 19.29% increase in retail transactions, rising from N74.19 billion to N88.50 billion.
The institutional composition of the domestic market also experienced a significant surge, increasing by 81.72% from N108.55 billion in April 2023 to N197.26 billion in May 2023.