NGX transactions fall to N509bn on foreign investments withdrawal

The Nigerian Exchange Limited recorded a sharp decline in trading activity in February 2025, as total transactions dropped by 16.07 per cent to N509.47bn from N607.05bn in January.

The decline was driven by a significant withdrawal of foreign investors, whose transactions fell by 40.36 per cent from N71.51bn to N42.65bn within the month.

Data from the NGX’s Domestic and Foreign Portfolio Investment Report released on Monday showed that foreign inflows dropped by 29.67 per cent to N18.05bn from N25.66bn in January, while foreign outflows also declined by 46.33 per cent to N24.60bn from N45.85bn.

The drop in foreign participation reduced their overall share of trading to just 8.37 per cent, compared to 11.78 per cent in January, highlighting the continued dominance of domestic investors in the equities market.

In contrast, domestic investors retained control of the market, accounting for 91.63 per cent of total transactions. However, their trading volume also saw a decline, falling by 12.83 per cent from N535.54bn in January to N466.82bn in February.

A breakdown of domestic transactions revealed that retail investors contributed N214.51bn, a 19.76 per cent decrease from N267.35bn in January, while institutional investors accounted for N252.31bn, a 5.92 per cent drop from N268.19bn in the previous month.

The decline in foreign transactions underscores growing concerns over investor confidence in Nigeria’s capital market.

On a year-to-date basis, total transactions for the first two months of 2025 stood at N1.12tn, with domestic investors accounting for N1tn, representing 89.78 per cent, while foreign investors contributed N114.16bn, making up 10.22 per cent.

Compared to the same period in 2024, which recorded total transactions of N1.01tn, there was an increase of 10.62 per cent in market activity. However, the share of foreign participation has continued to shrink from 11.78 per cent in 2024 to 10.22 per cent in 2025.

Over the past 18 years, data shows that domestic participation in the Nigerian equities market has grown steadily, rising by 33.15 per cent from N3.56tn in 2007 to N4.73tn in 2024, while foreign transactions increased by 38.31 per cent from N616bn to N852bn in the same period. Despite this growth, foreign participation has remained relatively low, averaging just 15 per cent of total transactions in 2024, while domestic investors accounted for 85 per cent.

The PUNCH reported that foreign investors withdrew N455.62bn from the Nigerian stock market in 2024, significantly outpacing total inflows and reinforcing concerns about investor confidence despite the Central Bank of Nigeria’s efforts to stabilise the naira.