In April 2024, the Nigerian Exchange Limited (NGX) disclosed that the total transactions, both domestic and foreign, within the nation’s equity market amounted to N346.23 billion. This information was relayed in a statement from the NGX, which was made available to Nairametrics.
Compared to March 2024 figures, there was a noticeable decrease of 35.71% in total transactions at the bourse, dropping from N538.54 billion to N346.23 billion in April 2024. The decline is attributed to cautious investor sentiments amidst persistent market volatility.
The NGX All-Share Index suffered a substantial setback in April, shedding N3.57 trillion in market value. This downturn was largely influenced by policy announcements from the Central Bank of Nigeria (CBN), which appeared to favor fixed-income securities.
A closer examination of transaction data between April and March 2024 revealed a 49.27% decrease in total domestic transactions, plummeting from N444.28 billion to N225.40 billion in April. Conversely, total foreign transactions surged by 28.19%, rising from N94.26 billion to N120.83 billion during the same period.
Institutional investors outpaced retail investors by 10%, according to NGX’s assessment. Retail transactions dwindled by 54.89%, from N223.37 billion in March to N100.77 billion in April 2024. Meanwhile, institutional transactions within the domestic market also experienced a decline of 43.58%, sliding from N220.91 billion to N124.63 billion.
Over a span of 16 years, from 2007 to 2023, domestic transactions dipped by 10.94%, from N3.556 trillion to N3.167 trillion. Similarly, foreign transactions witnessed a decline of 33.28%, falling from N616 billion to N411 billion over the same period. In 2023, domestic transactions constituted approximately 89% of the total, with foreign transactions making up the remaining 11%.
The NGX All-Share Index’s substantial drop in April was primarily influenced by various policy pronouncements from the Central Bank of Nigeria (CBN). One significant announcement was the introduction of a new recapitalization plan for commercial banks, targeting an estimated N4 trillion in fresh capital infusion over the next two years. Additionally, market reactions were spurred by the CBN’s decision to raise the benchmark interest rate by 200 basis points, climbing from 22.75% to 24.75%.
The decline in total transactions and market value underscores the need for investors to navigate cautiously amidst the prevailing market uncertainties and regulatory changes.
