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Nigerian Exchange Limited
The Nigerian equity market recorded a total of N8.05tn in transactions between January 2023 and October 2024.
Data from the Domestic and Foreign Portfolio Investment Report of Nigerian Exchange Limited shows that domestic investors dominated trading activity, accounting for N6.9tn, or 85.7 per cent of the total value, while foreign investors contributed N1.15tn, representing 14.3 per cent of the overall transactions during the period.
Within the domestic category, institutional investors emerged as the most active players, contributing N3.86tn, which constituted 47.9 per cent of the total transactions. Retail investors followed closely, with a contribution of N3.03tn, representing 37.6 per cent of the overall market activity.
On the foreign side, inflows into the market amounted to N519.10bn, while outflows were recorded at N635.86bn over the 22-month period. This highlights a net capital outflow trend, reflecting cautious sentiments from international investors amid prevailing macroeconomic uncertainties.
Breaking down the figures, the year 2024 saw a higher level of activity compared to 2023. In the ten months of 2024, total equity market transactions reached N4.47tn, surpassing the N3.58tn recorded in the entire 2023. Foreign participation slightly improved in 2024, with foreign investors contributing N744.34bn, or 16.65 per cent of the year’s total, compared to N410.62bn, or 11.48 per cent in 2023.
Despite the uptick in foreign participation, domestic investors continued to dominate the market. In 2024, domestic transactions amounted to N3.73tn, or 83.35 per cent of total trading activity, further emphasising the pivotal role of local investors in driving the market.
Retail and institutional investors within the domestic category showed varying levels of participation. Institutional investors accounted for N1.91tn in 2024, compared to retail investors’ N1.82tn. Similarly, in 2023, institutional investors contributed N2.05tn, while retail investors recorded N1.12tn.
The disparity between foreign inflows and outflows underscores a cautious approach by international investors, influenced by Nigeria’s challenging economic environment, including foreign exchange volatility and inflationary pressures.
The analysis also revealed a month-on-month variation in trading activity. For instance, January 2023 recorded a total transaction value of N195.10bn, which gradually increased to N343.90bn by December 2023. The trend continued into 2024, with peak monthly activity recorded in March at N538.54bn, driven by increased domestic and foreign participation.
As the Nigerian equity market continues to attract both domestic and international investors, the dominance of local investors signals resilience amid global uncertainties. However, the market’s reliance on domestic institutional players highlights the need for policies that encourage more retail participation and restore foreign investor confidence.
The PUNCH reported that domestic transactions on the Nigerian Exchange reached N3.73tn year-to-date in October, accounting for 83.35 per cent of total market activity.
