Based on the recently released NGX Domestic & Foreign Investment report for December 2021, the total value traded on the local bourse declined by 19.3% m/m to N158.3billion (US$363.8million) in December from N196.1billion (US$472.5million) in November.
Similarly, since the local bourse lacked the visit of a Santa Claus rally in December, the broad equity index, All
Share Index (ASI), returned a 2.1% m/m loss in December, despite the YTD gain of 6.1% at year-end. The decline in total transaction value was broad-based as both the domestic (-2.9% m/m) and foreign investors (-49.2% m/m) reduced activity level, with the latter shedding more weight than the former.
Institutional investors still largely dominated transactions at the domestic front, trading higher by 5.1% m/m to N85.2billion (US$195.9million) in December. Despite the marginal increase, total domestic transaction value was down 2.9% m/m to N122.9billion (US$282.6million) as the retail investors significantly reduced participation on the local bourse by 17.1% m/m to N37.7billion (US$86.8million).
On the other hand, foreign investors have been net sellers of Nigerian equities for most of 2021, retaining apathy towards Nigerian risky assets. From a net outflow position of N3.3billion (US$8.0million) in November, it grew to N4.4billion (US$10.1million) in December, a fallout of higher foreign outflows of N19.9billion (US$45.7million) compared with inflows of N15.5billion (US$35.5million).
Looking ahead, 2022 began the year on a positive note as the euphoria that met the newly listed BUA Foods Plc spurred activities in the local bourse. Currently, the YTD gain stands at 8.2%, which is likely to maintain an upward trajectory in the short term. In our view, the ongoing release of favourable full-year numbers accompanied by dividend declarations will propel buying activities.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
