Investors’ demand for Nigerian Stocks has maintained an upward trend in the last four months, as total portfolio investments rose by N223.4 billion between August and November 2020.
This is according to a domestic and foreign investments report released by the Nigerian Stock Exchange (NSE).
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According to the report, the total portfolio investments rose by 236.5%, from N94.45billion recorded as at August 2020. The breakdown of the lump sum shows that domestic transactions contributed about 78.82% of the total portfolio transactions as atNovember 2020, while foreign transactions contributed 21.18% for the period under review.
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Key highlights
- Total portfolio investment between January and November stood at N1.9 trillion
- Between August and November 2020, foreign transactions increased by N28.33 billion.
- Domestic transactions rose astronomically between the periods under review, from N55.47 billion to N250.50 billion, indicating a gain of 351.6%.
Compared to the months of October 2020, the performance of the current month indicates that total portfolio investments rose by N72.91 billion.
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What you should know
- Nairametrics earlier reported that Nigerian Stocks was ranked World’s best-performing stock market in 2020, with a Year-to-Date return of 50%
- The report showed that over a thirteen (13) year period, domestic transactions decreased by 72.30% from N3.556trillion in 2007 to N985billion in 2019.
- On the other hand, the historical trend also revealed that foreign transactions increased by 53.08% from N616billion to N943billion over the same period.
- In 2019, total domestic transactions accounted for about 51% of the total transactions carried out, whilst foreign transactions accounted for about 49% of the total transactions in the same period.
READ: Trading on Nigerian equities has dropped by 44%
Bottom Line
A long-run analysis of the Nigerian total portfolio investment demand showed that foreign transactions outgrew local transactions, indicating that Nigeria stocks are highly competitive and demanded more by foreign nationals, whereas a short-run analysis proved otherwise.
READ: Nigerian economy’s 40% exposure to foreign credit is dangerous- CBN
One key takeaway from the report is that the long-run trend is narrowing down especially in the last couple of months, as more Nigerian investors venture into the market.
