In November 2023, foreign participation in the Nigerian Exchange (NGX) hit N71.37 billion ($75.76 million), representing 23.74% of the market’s monthly total transactions. This marks the highest foreign portfolio participation recorded in the NGX in 2023.
According to data released by the NGX and tracked by Nairametrics, the total transaction recorded in the NGX in November 2023 was about N300.67 billion, with domestic participation making up N229.30 billion.
- Total foreign inflow in November 2023 hit N34.77 billion ($36.91 million) while foreign outflow during the month hit N36.60 billion ($38.85 million).
- In contrast, domestic inflow into the market in November 2023 was N113.53 billion, while domestic outflow was N113.77 billion.
- Domestic institutional investors made up about N136.52 billion, while domestic retail investors made up N92.78 billion.
- On a month-on-month basis, the total transactions in the NGX increased by 34.08% in November 2023 to N300.67 billion, from the N220.94 billion recorded in October 2023.
- Also, there was a 113.94% month-on-month growth in foreign transactions to N71.37 billion in November 2023, from the N33.36 billion recorded in October 2023, when foreign transactions represented 15.1% of the total transactions.
- The total transactions recorded in the NGX as of November 2023 is N3.234 trillion, which is 39.16% higher than the total transactions recorded throughout 2022.
What you should know
Foreign transactions in the NGX hit a peak in 2014 with N1.539 trillion, compared to the N1.137 trillion domestic transactions recorded that year.
However, the decline in foreign transactions in the NGX started in 2019, when foreign participation hit N943 billion, down from the N1.219 trillion recorded the previous year.
In 2022, foreign participation in the NGX fell to its lowest ever since 2007, with N379 billion. And, based on available data, NGX’s foreign participation figure in 2023 is on track to be at par with the 2022 figure.
About the exchange rate, it is yet to be seen what impact the resurgence of foreign participation in the NGX will have on the exchange rate.
Experts have routinely touted the slump in foreign portfolios in Nigeria’s capital market as one of the factors affecting the supply of FX in the country.
However, with the gradual re-entry of these investors back into the Nigerian capital market, there are yet to be any observable changes to the state of the exchange rate, even as the Naira has continued its slump to the N1000/$ territory.
