The Nigerian equities market saw a 1.97% rise in total domestic and foreign participation in equity trading, reaching N502.73 billion in October 2024, according to a report by the Nigerian Exchange Limited (NGX).
The N502.73 billion recorded in October 2024 represents a marginal 1.97% increase month-on-month (MoM) from N493.01 billion in September 2024.
On a year-on-year (YoY) basis, the October investment transactions mark a significant 127.54% increase compared to N220.94 billion in October 2023.
Domestic investors accounted for N466.27 billion, representing 90.56% of the total, while foreign investors contributed N47.46 billion, making up 9.44%. This highlights the significant dominance of local investors, whose participation outweighed that of foreign investors by a staggering 859.27%.
Domestic Investment Dominates Market Activity
Domestic Transactions:
Total domestic investment participation grew marginally by 0.81% or N3.67 billion month-on-month, rising from N451.60 billion in September 2024.
- Year-on-year, domestic investment transactions soared by 142.71% or N267.69 billion, up from N187.58 billion in October 2023.
- For the month of October, institutional investors were the dominant players, contributing N285.23 billion (67.74%), compared to N170.04 billion by retail investors in the same month.
- On a month-on-month basis, institutional investors significantly outperformed. The retail investment transactions declined sharply by 40.98% from N288.10 billion in September. Whereas institutional investment transactions surged by 74.45%, rising from N163.50 billion in the previous month.
Foreign Transactions:
Foreign investor participation increased by 14.61% or N6.05 billion, climbing from N41.41 billion in September to N47.46 billion in October 2024.
- On a year-on-year basis, foreign investment transactions rose by 42.27% or N14.10 billion, up from N33.36 billion in October 2023.
- October recorded the highest net inflows of foreign investment in equities this year, amounting to N19.16 billion. Earlier in the year, total foreign investment transactions in April and May surpassed those of October, but the net inflows during those months were lower than in October due to outflows exceeding inflows.
- Total foreign inflows stood at N33.31 billion, while outflows totalled N14.15 billion.
Cumulative investment transactions for 2024
- In the first 10 months of 2024, foreign investments in equities declined, with total outflows exceeding inflows by 13.93% or N55.74 billion.
- Foreign inflows amounted to N344.30 billion, while outflows reached N400.04 billion, as investors appeared to sell off for profit-taking.
- For domestic investors over the same period, retail participation outpaced institutional transactions by 5.14% or N93.35 billion.
- Total retail investment stood at N1.90 trillion, compared to N1.81 trillion from institutional investors.
Implications for the Market
- The disparity between domestic and foreign participation highlights the increasing reliance on local investors to drive market activity in Nigeria’s equities market.
- The steady rise in institutional investment underscores growing confidence among domestic players, while subdued foreign participation indicates cautious optimism amid global economic uncertainties.
- This trend reflects the evolving dynamics of the Nigerian equities market, where domestic investors continue to dominate, supported by a combination of local institutional and retail players.