The Nigerian Exchange reported a total transaction value of N502.73 billion (approximately $300.05 million) for both domestic and foreign portfolio investments in October 2024.
This represents a modest 1.97% increase compared to the N493.01 billion ($307.84 million) recorded in September 2024.
Despite a depreciation in the Naira from N1,601.52/$1 in September to N1,675.49/$1 in October, which led to a lower dollar valuation, the nominal increase in Naira still marks the highest monthly performance in the second half of 2024.
This also stands as the third-highest monthly performance of the year, trailing behind March (N538.54 billion) and January (N651.52 billion).
Year-to-date (YTD) data shows that total transactions for 2024 have reached N4.47 trillion ($2.67 billion), the second-highest annual figure over the past 17 years, exceeded only by the performance in 2007.
Domestic investors were the dominant force in the market, accounting for N455.27 billion ($272.25 million), which represents 90.56% of the total market activity in October. This marked a slight increase from N451.6 billion ($281.98 million) in September.
Foreign portfolio investments (FPI) contributed N47.46 billion ($28.33 million), up from N41.41 billion ($25.86 million) in the previous month, reflecting a 14.61% increase in foreign activity. However, foreign participation remained low, representing just 9.44% of the total transactions for the month.
Domestic institutional investors played a significant role, with their transactions surging by 74.45%, rising from N163.5 billion in September to N285.23 billion ($170.14 million) in October.
In contrast, domestic retail investor participation saw a sharp decline of 40.98%, dropping from N288.1 billion ($180 million) to N170.04 billion ($101.42 million).
Despite a positive net inflow of N33.31 billion ($19.87 million) from foreign investors, foreign participation in the market has been sluggish. This follows the trend of persistent macroeconomic challenges, including the ongoing volatility of the Naira and uncertainties surrounding Nigeria’s fiscal and monetary policies.
Although high interest rates set by the Central Bank of Nigeria were expected to attract foreign capital, the equity market has yet to see a significant influx from these policy measures.
The N502.73 billion transaction value in October represents a 127.54% increase compared to October 2023, when total transactions amounted to N220.94 billion ($138 million).
On a YTD basis, domestic investors have contributed N3.73 trillion ($2.23 billion), accounting for 83.35% of total market activity, while foreign investors have contributed N744.34 billion ($445 million), or 16.65%.
The historical trend indicates a growing dominance of domestic investors in the Nigerian equities market, with foreign transactions declining by 33.28% since 2007, while domestic transactions have seen a smaller decline of 10.94% over the same period. This highlights the market’s increasing reliance on local capital for liquidity and stability.
Despite challenges such as currency devaluation and lower foreign investor participation, the NGX All-Share Index saw a 0.25% increase in October, pushing the market’s YTD gain to an impressive 32%.
This performance underscores the resilience of the Nigerian stock market, which continues to draw strength from domestic investors amid global and local economic headwinds.
