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Stock market rally: Domestic retail investors stage huge come back

By Nkiruka Nnorom

DOMESTIC retail investors staged a huge come-back last month on the Nigerian Stock Exchange, NSE, as they dominated transaction on domestic space for the first time this year.

Data on domestic and foreign portfolio participation on the local bourse for the period released by the Exchange, yesterday, showed that retail domestic investors staked N62.4 billion in June, which was an increase of 46.92 per cent compared to N42.47 billion participation level in the previous month.

They also accounted for 52.6 per cent of the total domestic investors’ portfolio during the period. For a long time now this category of investors had avoided the stock market due to huge losses and persistent decline in equities’ value.

Wholesale investors

But given the persistent bull-run in the market in the past three months, they began to increase their investments leading to upstaging institutional wholesale investors last month, a situation which market analysts believe would continue to end of this month.

Institutional composition of the domestic market decreased by 17.09 per cent from N67.95 billion recorded in May to N56.34 billion in June 2017. The data also showed that domestic investors continued to hold sway, outperforming their foreign counterparts by 7.8 per cent.

Specifically, the domestic composition of the market rose to N118.74 billion out of N220.27 billion recorded within the month, representing 53.91 per cent of the total market transaction in June, a trend that has persisted in the market in the last six months.

On a month-on- month basis, total domestic transactions increased by 7.53 per cent from N110.42 billion recorded in May 2017 to N118.74 billion in June 2017, while foreign transactions also increased by 6.66 per cent from N95.19 billion to N101.53 billion within the same period.

Monthly foreign inflows outpaced outflows. However, foreign inflows decreased by 10.95 per cent from N73.15 billion in May to N65.93 billion in June 2017, while foreign outflows increased by 38.09 per cent from N22.04 billion to N35.60 billion in June 2017.

In comparison to the first half of 2016, total foreign portfolio investment, FPI, transactions increased by 59.81 per cent from N269.22 billion to N430.23 billion, while the total domestic transactions increased by 42.19 per cent from N505.03 billion to N355.19 billion.

Total transactions at the nation’s bourse increased by 7.13 per cent from N205.61billion recorded in May 2017 to N220.27 billion in June 2017. Also, total transactions for the first half of the year increased by 49.78 per cent from N624.41 billion recorded in 2016 to N935.26 billion in 2017.

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