Portfolio Investments Exhibited Mixed Performance Over Time 

The Nigerian Exchange Limited (NGX) issued a report on the performance evaluation of local and foreign portfolio investments, which revealed a mixed picture. The total transactions recorded as of June 30, 2023, increased by 25.96 percent, from N322.92 billion in May 2023 to N406.75 billion in June 2023, according to the report.

When the performance of June 2023 was compared to that of June 2022, which was N156.52 billion, the report revealed a tremendous increase of 159.87 percent in total transaction volumes. A comparison of transactions conducted by domestic investors (DIs) and foreign investors (FIs) found a higher performance by DIs, with a 78 percent outperformance margin.

Furthermore, a detailed examination of transactional activity from May to June 2023 found that total domestic transactions increased by 26.34 percent, ranging from N285.76 billion in May to N361.01 billion in June 2023. Similarly, total international transactions increased by 23.09 percent, rising from N37.16 billion to N45.74 billion between May 2023 and June 2023.

However, while examining the trajectory over the last sixteen years, the analysis revealed a 45.30 percent decrease in domestic transactions, falling from N3.556 trillion in 2007 to N1.945 trillion in 2022. In parallel, international transactions have decreased by 38.47 percent, falling from N616 billion to N379 billion over the same time period.

These performance patterns in domestic and foreign portfolio investment highlight the need for consistent reforms in the Nigerian economy’s financial sector. Furthermore, given the deep interplay of socioeconomic and political elements that may contribute to this varied performance, it is clear that a strong framework of macroeconomic and financial policies is critical. These steps are critical to fostering strong investor trust in Nigeria’s banking industry. SOURCE: CSEA AFRICA