January 23, 2025/CSL Research

Domestic investors continued to dominate market activity at the Nigerian Exchange Limited (NGX) in 2024, contributing a remarkable 84% of the total transaction value as of November, compared to just 16% from Foreign Portfolio Investors. This robust domestic participation has significantly bolstered the market, providing much-needed stability and resilience. The strong local presence has helped shield the market from external shocks and global financial market contagions, ensuring a steady performance despite global economic uncertainties.

Total transactions year-to-date on the nation’s bourse as of November 2024 was ₦4,913.31 billion, up 51.9% year-on-year (y/y) from the corresponding period of 2023 at ₦3,234.06 billion. Domestic portfolio transactions contributed ₦4,128.03 billion to the total, with retail investors accounting for ₦2,105.37 billion (51%) and institutional investors contributing ₦2,022.66 billion (49%). This marks a notable increase compared to the corresponding period in 2023, when retail participation stood at ₦1,028.56 billion (36%) and institutional participation at ₦1,842.75 billion (64%), out of a total domestic portfolio transaction value of ₦2,871.31 billion.

Foreign Portfolio Investor (FPI) activity on the domestic bourse experienced a significant surge, with total transactions reaching ₦785.28 billion as of November 2024. This represents an impressive 116.5% year-on-year (y/y) increase compared to ₦362.75 billion in the same period of 2023. As of November 2024, foreign portfolio inflows amounted to ₦370.15 billion, while outflows were slightly higher at ₦415.13 billion. These figures show a substantial improvement compared to the corresponding period in 2023, when inflows stood at ₦157.32 billion and outflows at ₦205.43 billion.

Looking ahead into 2025, FPI participation is projected to improve, supported by pro-market reforms and continued investor optimism surrounding the second phase of the recapitalization drive by banks. Also, a more stable currency is expected to mitigate the impact of foreign exchange losses on corporate profitability, which could further enhance investor confidence and bolster FPI activity.

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