Nigerian Exchange Limited (NGX) says that the total domestic and foreign portfolio transactions in Nigeria’s equity market amounted to N346.23 billion in April 2024.
This was contained in a statement from the NGX, made available to Nairametrics.
According to the Exchange, as of April 30, 2024, total transactions at the nation’s bourse decreased by 35.71% from N538.54 billion (about $404.69 million) in March 2024 to N346.23 billion (about $260.24 million) in April 2024.
The decline may not be unconnected with the prevailing low sentiments among investors, who have exhibited cautious behaviour in light of the persistent volatility in the Nigerian market.
The NGX All-Share Index experienced a significant decline in April, losing N3.57 trillion in market value following policy announcements from the Central Bank of Nigeria (CBN) that tended to favour fixed-income securities.
A further analysis of the total transactions executed between April and the prior month (March 2024) revealed that total domestic transactions decreased by 49.27%, from N444.28 billion in March to N225.40 billion in April 2024.
However, total foreign transactions increased by 28.19% from N94.26 billion (about $70.83 million) to N120.83 billion (about $90.83 million) between March 2024 and April 2024.
Institutional and retail investors
According to the NGX, institutional investors outperformed retail investors by 10%. A comparison of domestic transactions revealed that retail transactions decreased by 54.89% from N223.37 billion in March to N100.77 billion in April 2024.
Similarly, the institutional composition of the domestic market decreased by 43.58% from N220.91 billion in March 2024 to N124.63 billion in April 2024.
Performance in over a decade
Over a 16-year period, domestic transactions decreased by 10.94% from N3.556trillion in 2007 to N3.167trillion in 2023; whilst foreign transactions also fell by 33.28% from N616billion to N411billion over the same period.
Total domestic transactions accounted for about 89% of the total transactions carried out in 2023, whilst foreign transactions accounted for only 11% of the total transactions in the same period.
What you should know
In April, the NGX All-Share Index experienced a substantial decline, resulting in a market value loss of N3.57 trillion.
- The significant drop in the index was influenced by several policy announcements from the Central Bank of Nigeria (CBN).
- A notable announcement was the new recapitalization plan for commercial banks, which aims to raise an estimated N4 trillion in fresh capital over the next two years.
- Additionally, the market reacted to the CBN’s Monetary Policy Committee (MPC) decision to increase the benchmark interest rate by 200 basis points, from 22.75% to 24.75%.
- This substantial rate hike led to intensified sell-offs, resulting in a 6% decline in the local bourse, with the benchmark index closing at 98,225.63 points.
- Significantly, the NGX All-Share Index fell below the 100,000-point threshold, closing at 98,225.63 points, a stark contrast to its peak of 104,562.06 points at the end of March 2024.