The Nigerian Exchange Limited (NGX) reported that total transactions on the local bourse surged to N2.35 trillion by the end of May 2024. This figure marks a significant 115.40% increase compared to the same period in 2023.
According to the domestic and foreign portfolio participation in equity trading report released by the NGX on Thursday, domestic investors continued to dominate the market, accounting for N1.79 trillion (79.63%) of the total transactions. In contrast, foreign investors contributed N458.29 billion (20.37%).
Breaking down the domestic investments further, institutional investors led with N906 billion, slightly outpacing retail investors, who recorded N885.19 billion.
The period between May 2023 and May 2024 saw Nigeria undergo significant leadership changes, resulting in critical economic reforms. These included the harmonization of the foreign exchange market and the removal of fuel subsidies. Experts believe these measures will boost the capital market and attract foreign investors back to Nigeria.
During this timeframe, the Monetary Policy Rate (MPR) was raised multiple times, reaching 26.25% at the May 2024 Monetary Policy Committee meeting.
PwC, in its Nigeria economic outlook titled “Navigating Economic Reforms,” noted that the Nigerian Stock Exchange’s market capitalization increased by 85.2%, from N30.3 trillion in May 2023 to N56.5 trillion in May 2024. This growth was driven partly by positive performances in key sectors: oil and gas (124%), consumer goods (104%), insurance (88%), and banking (69%).
The yield on Nigeria’s 10-year government bond also hit an all-time high of 19.30% in May 2024, up from 14.55% in May 2023. This rise was attributed to attractive rates on Open Market Operation (OMO) bills and treasury bills, influenced by the MPR hikes.
Month-on-month data from NGX showed that total transactions increased from N346.23 billion in April to N355.38 billion in May, a rise of 2.64%. Domestic investor participation grew by 2.53%, from N225.40 billion in April to N231.10 billion in May. Institutional investors outperformed retail investors by 2%, recording N117.57 billion compared to N113.53 billion.
Foreign transactions also saw a 2.86% increase, rising from N120.83 billion in April to N124.28 billion in May 2024.
This upward trend in transactions and market capitalization reflects growing confidence in the Nigerian capital market amidst ongoing economic reforms.
