Total domestic investors’ participation on the Nigerian Stock Exchange, NSE, fell by approximately 17 per cent in the month of March as apathy continues to greet equity investment in the nation’s capital market.
According to figures released by the NSE, weekend at the end of the month of March , domestic investors reduced their stake to N61.87 billion, indicating 63.52 per cent participation from N74.49 billion they committed in the market in February this year. This represents a total decline of 17 per cent during the period. Similarly, foreign portfolio investors’ participation took a downward trend falling from N42.78 billion, representing 36.48 per cent participation to N34.44 billion, which represents 35.76 per cent participation level.
Generally, total transactions at the nation’s bourse decreased by 17.87 per cent from N117.27 billion recorded in February 2016 to N96.31 (about $0.49 billion) in March 2016. In comparison to the same period in 2015, total transactions decreased by 47.66 per cent from the N184.02 recorded in March 2015.
Analysts have said that investors are increasingly finding investment in risky assets (equities) more unattractive following the delayed take-off of the new government’s economic policies, depletion in the foreign reserve occasioned by dwindling crude oil price and the exchange rate crisis among others. According to them, investors are also shying away from the equity market due to not-too-good financial result being released by majority of the quoted companies.
However, domestic investors outperformed foreign investors by 28.48 per cent in the review period. Monthly foreign outflows outpaced inflows which was consistent with the same period in 2015. Foreign outflows decreased by 40.20 per cent from N31.84 billion in February 2016 to N19.04 billion while foreign inflows increased by 40.77 per cent from N10.94 billion in February 2016 to N15.40 billion in March 2016.
Meanwhile, a turnover of 910.659 million shares worth N6.409 billion in 15,023 deals were traded by investors on the floor of the Exchange in contrast to a total of 1.210 billion shares valued at N7.115 billion that exchanged hands in 15,973 deals in the preceding week.
The Financial Services Industry (measured by volume) led the activity chart with 757.354 million shares valued at N3.180 billion in 8,853 deals; thus contributing 83.17 per cent and 49.62 per cent to the total equity turnover volume and value respectively.