Chris Ugwu 
In May 2020, the total value of transactions executed by domestic investors outperformed transactions executed by foreign investors by circa 40 per cent. According to a report obtained from the Nigerian Stock Exchange (NSE), as at May 31, 2020, total transactions at the nation’s bourse decreased by 7.40 per cent from N128.67billion (about $332.22 million) in April 2020 5 to N119.15 billion (about $307.32 million). The performance of the current month when compared to the performance in May 2019 (N221.13 billion) revealed that total transactions decreased by 46.12 per cent.
A further analysis of the total transactions executed between the current and prior month (April 2020) revealed that total domestic transactions increased by 11.15 per cent from N75.49 billion in April to N83.91 billion in May 2020. However, total foreign transactions decreased by 33.73 per cent from N53.18 billion (about $137.37 million) to N35.24 billion (about $90.89 million) between April and May 2020. Retail investors marginally outperformed institutional Investors by 0.5 per cent. A comparison of domestic transactions in the current and prior month (April 2020) revealed that retail transactions increased by 4.38 per cent from N40.42 billion in April 2020 to N42.19 billion in May 2020. Similarly, the institutional composition of the domestic market increased by 18.96 per cent from N35.07 billion in April 2020 to N41.72 billion in May 2020.
Highlights of the performance of the market over the last decade revealed that over a 13-year period, domestic transactions decreased by 72.30 per cent from N3.556 trillion in 2007 to N985 billion in 2019 whilst foreign transactions increased by 53.08 per cent from N616 billion to N943 billion over the same period.
Total domestic transactions accounted for about 51 per cent of the total transactions carried out in 2019, whilst foreign transactions accounted for about 49 per cent of the total transactions in the same period. The actual performance referenced 2020A (2020 Actual) showed that total foreign transactions carried out year till date (YTD) is about N340.29 billion whilst total domestic transactions YTD is about N534.37 billion.
The Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said recently that the sustained trading that was activated at the early lockdown contributed to increased domestic investors’ performance, stressing that timely market information drove liquidity. Onyema disclosed that the nation’s capital market was currently dominated by 60 per cent domestic investors as against 40 per cent foreign investors. Speaking last week at a webinar titled: “Capital Markets in a Pandemic,” he noted that the economy in the last three months was facing dwindling crude oil prices and that the Coronavirus pandemic had led to foreign investors’ exit from the capital market.
He said: “During the lockdown, we kept the capital market opened. We immediately activated business continuity plans and luckily for us, the evolution of technology and digitalisation at all capital markets globally started before the pandemic. We were able to quickly flip the switch and go completely remote. “We were reaching out to our dealing member firms via electronic platform and supporting corporates that are listed on the exchange and putting out market moving information.
“We engaged with policy makers and regulators to provide various palliatives and accommodations for market players to continue to drive liquidity in the market. “What we have seen as a result is that there has been a significant increase in activities in the capital market at secondary level, driven by domestic players.” He said these challenges mounted significant pressure on the capital market volatility, stressing that the Exchange sustainability in operations played a critical role at domestic participation. He expressed that the Exchange remote trading and engagement of market stakeholders was yielding results, with increased domestic investors participation and federal/state government decision to access bonds on the capital market.
