A Review of the Nigerian Energy Industry

Domestic participation at NSE rose 26.33% in April

31 May 2015, Lagos – There are strong indications that the Nigerian stock market is becoming attractive to domestic investors as local participation at the nation’s bourse increased to N102.91 billion (about $0.52 billion) in April 2015, up 26.33 per cent from March 2015.
Nigerian-Stock-Exchange.NSEInformation obtained from the Nigerian Stock Exchange (NSE) last week showed that domestic investors gained about 0.5 per cent of trading from foreign investors as the percentage of foreign transactions decreased from 55.73 per cent to 50.25 per cent while domestic transactions increased from 44.27 per cent to 49.75 per cent over the same period. In all, the NSE report showed a significant increase in total domestic transactions in April compared to March.
The FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (Equities only).
The March 2015 and April 2014 transactions are included for comparison to the April 2015 transactions. On a monthly basis, the NSE collated trading figures from major custodians and market operators on their foreign portfolio investments (FPI).
The NSE report also showed that total transactions increased by 12.41 per cent from N184.02 billion in March to N206.86 billion in April and foreign portfolio investors’ inflows accounted for 26.20 per cent of total transactions while the outflows accounted for 24.05 per cent of the total transactions in April 2015. In comparison to the same period in 2014, total FPI transactions decreased by 15.47 per cent, whilst the total domestic transactions increased by 51.94 per cent.
“FPI inflows outpaced out flows which were consistent with the same period in 2014.
“Overall, there was an 8.47 per cent increase in total transactions in comparison to the same period in 2014,” the report stated.
A further breakdown of the figure showed that in the corresponding period of last year, N190.70 billion was the value of total transactions. However, the value of total transactions so far this year was put at N765.09 billion.
Total foreign inflow for the month of April was N54.20billion, a slight increase from N50.15 billion recorded in the preceding month, whereas N68.35 billion was the value of foreign inflow in the corresponding period of last year. Total foreign inflow so far this year was put at N204.73 billion.
While the total foreign outflow for the month of March was put at N52.41 billion, that of April totalled N49.75 billion whereas N54.62 billion was the value of total foreign outflow for the month of April 2014.  So far, total foreign outflow, according to NSE is N234.84 billion.
Meanwhile, the exchange has disclosed that total domestic transactions increased by 13.56 per cent in January to April 2015. The institutional composition of the domestic market which was about 33.69 per cent at the end of January increased to 49.41 per cent at the end of April, whilst the retail composition decreased from 66.31 per cent to 50.59 per cent in the same period.
“Total FP transactions of N616 billion which accounted for 14.8 per cent of total transactions in 2007 increased over the years to N1.539 trillion, representing 57.5 per cent of total transactions in 2014(an increase of 42.7 per cent over the seven year period).
“Domestic transactions on the other hand started at N3, 556 billion representing 85.2 per cent in 2007, but decreased significantly to N1, 137 billion representing 42.5 per cent of total transactions in 2014,” the exchange stated.
Information on the retail and institutional components of the total domestic transactions in April is based on data obtained from about 97 per cent of active dealing members of the exchange.

 

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