Domestic transactions on the Nigerian Exchange (NGX) reached a remarkable N3.73 trillion year-to-date (YTD) as of October 2024, accounting for 83.35% of total market activity. The data underscores the growing dominance of local investors in driving market performance.
In October, total market transactions increased slightly by 1.97% to N502.73 billion, up from N493.01 billion in September. Domestic transactions accounted for N455.27 billion, representing 90.56% of the market activity for the month.
Institutional Investors Lead Domestic Activity
Institutional investors continued to dominate domestic transactions, contributing N285.23 billion, while retail investors accounted for N170.04 billion. Despite institutional dominance, retail investors maintained a solid presence, reflecting increased participation by individual investors.
From September to October, domestic transactions rose by 0.81%, up from N451.60 billion, further solidifying local investors’ control of the market.
Year-on-Year Growth
Year-on-year, total transactions in October soared by 127.54% from N220.94 billion recorded in October 2023. The surge was driven largely by domestic investors, whose increasing activity continues to overshadow foreign participation.
For the year, total market transactions rose from N2.93 trillion in 2023 to N4.47 trillion as of October 2024. Domestic transactions, with N3.73 trillion, maintained their commanding share of 83.35% of the total market.
Foreign Participation Remains Modest
Foreign transactions, while seeing incremental growth, remained secondary to domestic activity. In October, foreign inflows stood at N33.31 billion, while foreign outflows were N14.15 billion, bringing total foreign transactions to N47.46 billion. This marked a 14.61% increase from N41.41 billion in September.
Year-to-date, foreign transactions totaled N744.34 billion, accounting for 16.65% of market activity. While this is an improvement from N291.38 billion in 2023, foreign investors still play a limited role compared to their domestic counterparts.
Long-Term Trends and Challenges
Despite the recent growth, the market has seen a long-term decline in both domestic and foreign transactions. Between 2007 and 2023, domestic transactions fell by 10.94%, from N3.56 trillion to N3.17 trillion. Foreign transactions declined more sharply, by 33.28%, from N616 billion to N411 billion.
Foreign inflow into the NGX declined significantly in recent months, with the lowest value of the year recorded in September at N11.26 billion. However, the cumulative foreign inflow for the first nine months of 2024 stood at N310.99 billion, significantly higher than the N108.93 billion recorded during the same period in 2023.
Market Outlook
The dominance of domestic investors, particularly institutional ones, suggests continued resilience in Nigeria’s local investment landscape. However, the declining foreign inflow trends highlight the need for measures to attract more international participation, which could provide additional liquidity and boost overall market performance.
As domestic transactions continue to outpace foreign activity, the NGX reflects a shift toward local-led market growth, positioning domestic investors as the key drivers of Nigeria’s capital market.
