October 5, 2026/CSL Report
Data published by the Nigerian Exchange Limited (NGX) showed that total transactions on the domestic bourse declined 46.4% month-on-month (m/m) to ₦1.7 trillion in August, the lowest level recorded since the ₦0.9 trillion outturn in January. The pullback in market activity was broadly based, with transactions by both foreign investors (c.4.9% of total transactions) and domestic investors (c.95.1% of total transactions) declining by 53.2% m/m and 46.0% m/m to ₦62.0 billion and ₦1.2 trillion respectively.
Notably, the contraction in domestic transactions was driven by lower institutional and retail activity, which fell 60.4% m/m and 5.1% m/m to ₦654.6 billion and ₦552.9 billion respectively.
Although foreign transactions also slowed in August, net outflows moderated sharply by 81.6% m/m to ₦9.1 billion from ₦49.4 billion in July, as the more pronounced contraction in outflows, down 60.9% m/m to ₦35.6 billion, more than offset the decline in foreign inflows, which fell 36.4% m/m to ₦26.5 billion.
On a cumulative basis, we highlight that year-to-date (YTD) transactions on the exchange at the end of August amounted to ₦13.2 trillion, approximately double the ₦6.9 trillion recorded in the corresponding period of the prior year.
We anticipate a significant improvement in market activity by the end of September, supported by the re-inclusion of Nigeria into the FTSE Russell Frontier Market index as well as the launch of the Dangote Refinery Initial Public Offer (IPO).
Beyond September, transaction volumes on the exchange are expected to remain strong, driven by increased activity from domestic investors, particularly institutional investors, in response to anticipated lower fixed income yields following the 350 basis points (bps) rate cut by the apex bank. We believe that the repricing of Nigerian fixed income instruments could support increased portfolio reallocation from fixed income assets into equities, within permissible mandate limits.