The latest Domestic & Foreign Portfolio Investment Report from the Nigerian Exchange Limited shows that foreign inflow into the market dropped to its lowest in 2024, hitting N11.26 billion in September.
This marks a steady decline since May, which recorded the year’s highest inflow at N54.87 billion.
Despite the decline, total foreign inflow from January to September 2024 reached N310.99 billion, significantly higher than the N108.93 billion recorded during the same period in 2023.
The report also highlighted increased liquidation of investments by foreign investors between August and September.
Foreign outflows declined to N30.15 billion in September, up from N24.38 billion in August, according to the NGX report.
Experts attribute this trend to the unstable naira and a high-interest rate environment, which are driving investors away from equities toward assets offering better yields.
The naira closed trading on the Nigerian Autonomous Foreign Exchange Market at 1652.25/$ on Friday and at its last meeting, the Monetary Policy Committee of the Central Bank of Nigeria pegged the benchmark interest rate at 27.25 per cent.
The Central Bank of Nigeria is expected to continue tightening interest rates to address rising inflation, which hit 33.88% in October. Analysts anticipate a potential rate hike at the next Monetary Policy Committee meeting, though likely a moderate one.
The NGX report shows a significant increase in total transactions at the local bourse, rising by 29.90% from N379.52 billion (approximately $237.70 million) in August to N493.01 billion (around $307.84 million) in September 2024.
“A further analysis of the total transactions executed between the current and prior month (August 2024) revealed that total domestic transactions increased by 40.23 per cent from N322.05bn in August 2024 to N451.60bn in September 2024. However, total foreign transactions decreased by 27.95 per cent from N57.47bn (about $35.99m) to N41.41bn (about $25.86m) between August 2024 and September 2024,” the report added.
