As foreign investors grow apathetic, the total value of domestic and foreign transactions on Nigerian Exchange (NGX) Limited in July 2022 amounted to N101.18 billion. These trades and trading figures from market operators were covered in NGX Regulation Limited’s Domestic and Foreign Portfolio Investment (FPI) in July 2022 report.

Meanwhile, despite rising inflation and volatility in the foreign exchange market, which remained essential drivers of FPIs, domestic investors have continued to dominate the market.

What’s happening
According to the report, overall stock market transactions by both local and foreign investors fell by 35.36 percent to N101.18 billion in July 2022 from N156.52 billion in June 2022.

An in-depth examination of total transactions indicated that total domestic transactions fell by 37.46% from N114.33 billion in June to N71.50 billion in July 2022. Similarly, total foreign transactions fell by 29.65% between June 2022 and July 2022, from N42.19 billion to N29.68 billion.

Furthermore, institutional investors outperformed retail investors, with retail transactions falling by 30.51 percent from N44.11 billion in June to N30.65 billion in July 2022. Similarly, the domestic market’s institutional composition fell by 41.83 percent, from N70.22 billion in June 2022 to N40.85 billion in July 2022.

What to expect
According to capital market specialists, despite Nigerian stocks being among the cheapest and most appealing in the world, investor interest in the Nigerian equities market is gradually declining.

“But a glimmer of optimism lies in the sustained outperformance by both individual and institutional domestic investors over their international counterparts in equities trading by a 42 percent margin,” Cowry Asset Management Limited writes.

On a monthly basis, local investors outpaced foreign investors by around 42% in July 2022, with domestic investors pulling a total transaction of N71.67 billion, while foreign investors pulled a total transaction of N29.68 billion for the month.

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