Foreigners stage impressive return to Nigerian stock market
Foreign stock buyers are staging an impressive return to the Nigerian equities market, accounting for 57.74percent of transaction in April against 42.26 percent by domestic investors.
From January to April this year, the cumulative transactions in equities were valued at N1.091trillion, according to Nigerian Stock Exchange (NSE) data obtained from about 98percent of active Dealing Members of the Exchange.
Out of the said value of stocks traded in four months to April, transactions worth N504.35billion were by foreign investors, while transactions valued at N586.85billion were done by domestic investors.
In April alone, stocks valued at N212.23billion were traded –foreign investors (N122.53billion) and domestic investors (N89.70billion).
In the first four months of 2018, returns from the Nigerian equities market stood positive at 7.91percent. Likewise, the value of listed equities rose to a record high of N14.95trillion as at April 30, from N13.62trillion on January 2, 2018; representing an increase of about N1.33trillion.
While outlook for the stock market in the near-term remains largely positive, impressive first-quarter (Q1) 2018 earnings helped trigger bargain hunting in mid-cap stocks, which buoyed stocks performance in April.
On monthly basis, the Nigerian Stock Exchange polls trading figures from major custodians and market operators on their Foreign Portfolio Investment (FPI) flows.
The total transactions at the nation’s bourse decreased by 22.11percent, from N272.48 billion recorded in March 2018 to N212.23 billion (about $70 million) in April 2018.
Foreign investors outperformed domestic investors by 15.48percent in April 2018. Total domestic transactions reduced by 36.05percent from N140.27 billion in March to N89.70 billion in April 2018. Foreign transactions also reduced by 7.32percent from N132.21 billion to N122.53 billion within the same period.
There was a 7.79percent decrease in foreign inflows from N69.71 billion in March 2018 to N64.28 billion in April 2018. Foreign outflows also reduced by 6.8percent from N62.50 billion to N58.25 billion within the same period.
Though there is still a higher participation by institutional investors over their retail counterparts, the institutional composition of the domestic market reduced by 49.04percent, from N91.27 billion in March to N46.51 billion in April 2018; while the retail composition also decreased by 11.86percent from N49 billion to N43.19 billion within the same period.
BusinessDay trend watch revealed many stocks that helped sustain the record N1.33trillion gain in four months to April 2018.
They include Cement Company of Northern Nigeria Plc (115.3percent), Unity Bank Plc (88.7percent), Skye Bank Plc (68percent), Caverton Offshore Support Group Plc (86percent), NEM Insurance Plc (68.7percent), Wema Bank Plc (61.5percent) and FCMB Group Plc (66.9percent) –all these stocks surpassed the NSE ASI recording returns in excess of 60 percent.
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