Total equity trading on the Nigerian Exchange Limited (NGX) fell by 9.89% to N607.05 billion in January 2025, down from N673.66 billion recorded in December 2024. This decline was primarily driven by a drop in domestic transactions, which decreased by 11.71% from N606.91 billion in December 2024 to N535.54 billion in January 2025, according to the NGX’s Domestic & Foreign Portfolio Investment Report released on Monday.
Despite the overall decline, foreign portfolio participation in the market showed a positive trend, with total foreign transactions rising by 7.13% from N66.75 billion (approximately $43.47 million) in December 2024 to N71.51 billion (approximately $48.38 million) in January 2025. This increase occurred despite the appreciation of the naira, which strengthened from N1,535.81/$ as of December 31, 2024, to N1,478.22/$ as of January 31, 2025.
Year-on-year, total transactions on the NGX declined by 6.83% compared to the N651.52 billion recorded in January 2024. Domestic investors continued to dominate the market, accounting for 88.22% of total transactions in January 2025, while foreign investors contributed 11.78%. In contrast, domestic participation in January 2024 stood at 91.85%, with foreign investors accounting for 8.15%.
Shift in Domestic Investor Composition
A closer look at domestic transactions revealed a notable shift in investor activity. Retail investors increased their participation by 33.10%, rising from N200.87 billion in December 2024 to N267.35 billion in January 2025. On the other hand, institutional investors, who traditionally dominate domestic trades, reduced their participation by 33.95%, declining from N406.04 billion in December 2024 to N268.19 billion in January 2025.
Long-Term Trends
Over an 18-year period, domestic transactions on the NGX have grown by 33.15%, increasing from N3.56 trillion in 2007 to N4.74 trillion in 2024. Similarly, foreign transactions rose by 38.31% during the same period, from N616 billion in 2007 to N852 billion in 2024.
In 2024, domestic transactions accounted for approximately 85% of total market activity, while foreign transactions made up 15%. As of January 2025, domestic investors had already executed transactions worth N535.54 billion, while foreign investors participated in trades valued at N71.51 billion.
Market Outlook
The decline in domestic transactions highlights a shift in investor behavior, with retail investors playing a more active role in the market. Meanwhile, the increase in foreign portfolio investment signals growing confidence among international investors, despite the strengthening of the naira.
As the NGX continues to navigate evolving market dynamics, stakeholders will be closely monitoring trends in both domestic and foreign participation to gauge the overall health and direction of Nigeria’s equity market.
