The Nigerian Exchange (NGX) recorded a total transaction value of N502.73 billion (approximately $300.05 million) for domestic and foreign portfolio investments in October 2024.
This represents a modest 1.97% increase from the N493.01 billion ($307.84 million) posted in September 2024.
While the Naira’s depreciation from N1,601.52/$1 in September to N1,675.49/$1 in October resulted in a lower dollar valuation despite higher nominal values in Naira, the transaction figure still represents the highest monthly performance in the second half of the year.
This also ranks as the third-highest monthly performance in 2024, trailing March (N538.54 billion) and January (N651.52 billion).
Year-to-date (YTD) data reveals that the exchange has recorded N4.47 trillion ($2.67 billion) in total transactions, the second-highest annual figure over the last 17 years, surpassed only by 2007.
Domestic Investors Lead the Way
Domestic investors dominated October’s transactions, accounting for N455.27 billion ($272.25 million), which represents 90.56% of total market activity.
- This figure marks a slight increase from N451.6 billion ($281.98 million) in September.
- On the other hand, foreign portfolio investments (FPI) contributed N47.46 billion ($28.33 million), up from N41.41 billion ($25.86 million) in the prior month, reflecting a 14.61% increase in foreign activity.
- Institutional investors drove domestic participation, with transactions surging by 74.45%, from N163.5 billion in September to N285.23 billion ($170.14 million) in October.
- Conversely, domestic retail participation dropped sharply by 40.98%, from N288.1 billion ($180 million) to N170.04 billion ($101.42 million) over the same period.
Foreign Participation: Slow Recovery Amid Currency Volatility
Foreign inflows into the market stood at N33.31 billion ($19.87 million), compared to N14.15 billion ($8.45 million) in outflows, resulting in a positive net inflow.
- However, foreign participation remains modest, accounting for just 9.44% of total transactions.
- The reduced activity of foreign investors aligns with persistent macroeconomic challenges, including the Naira’s volatility and uncertainties surrounding Nigeria’s fiscal and monetary policies.
- While high interest rates offered by the Central Bank of Nigeria have been expected to attract foreign inflows, the equity market has yet to fully benefit from these policy measures.
Significant Year-on-Year Growth
The total transaction value of N502.73 billion ($300.05 million) in October represents a 127.54% increase compared to October 2023, when transactions were valued at N220.94 billion ($138 million).
- YTD, domestic investors have contributed N3.73 trillion ($2.23 billion), accounting for 83.35% of total activity, while foreign investors have contributed N744.34 billion ($445 million), or 16.65%.
- The historical trend shows domestic dominance has grown over the years, with foreign transactions declining by 33.28% since 2007, while domestic transactions have seen a smaller decline of 10.94% in the same period.
- This highlights the reliance of the Nigerian equities market on local capital for liquidity and resilience.
Despite challenges such as currency devaluation and reduced foreign investor interest, the NGX All-Share Index rose 0.25% in October, pushing the market’s year-to-date gain to an impressive 32%.