The Nigerian equities market has continued to witness a significant shift in investor participation, as domestic investors continue to outperform foreigners in trading activities.
The latest Domestic and Foreign Portfolio Investment Report of Nigerian Exchange Limited (NGX) for 2024 showed that local investors accounted for approximately 85 per cent of total transactions, while foreign transactions made up a mere 15 per cent, showing a persistent decline in foreign investors’ confidence.
According to the data, total domestic transactions reached approximately N1.002 trillion, a stark contrast to total foreign transactions, which stood at N114.16 billion.
The widening gap suggests that while local investors are deepening their participation in the equities market, foreign investors remain on the sidelines due to concerns over foreign exchange volatility and policy uncertainties.
Operators said Nigerian institutional investors – such as pension funds, asset managers and high-net-worth individuals – have continued to show strong confidence in the local market.
According to them, the bullish run in the stock exchange towards the end of 2024, fueled by expectations of economic reforms and corporate earnings growth, has further encouraged domestic participation.
Retail investors have also played a significant role, with increased awareness and access to digital trading platforms driving greater market inclusion.
On the other hand, the subdued presence of foreign investors raises questions about Nigeria’s attractiveness as an investment destination. In recent years, concerns over capital repatriation, liquidity constraints in the foreign exchange market, and sudden policy shifts have deterred foreign portfolio investments.
The 2023 decision to float the naira, while intended to improve market efficiency, led to massive foreign exchange losses for many companies and eroded investor confidence.
President of the Independent Shareholders Association of Nigeria, Moses Igbrude said restoring foreign investor interest will require a combination of policy stability, improved ease of capital exit, and a more predictable foreign exchange framework.
According to him, while the Central Bank of Nigeria (CBN) has taken steps to address liquidity issues and ease FX restrictions, sustained confidence-building measures will be necessary to attract long-term foreign investments.
Further breakdown of the data showed that a of 28 February 2025, total transactions t the nation’s bourse decreased by 16 per cent from N607 billion in January 2025 to N509.5 billion in February 2025.
Also, the performance of the current month (February), when compared to the performance in February 2024 (N357.88 billion) revealed that total transactions increased by 42.4 per cent.
In addition, the total transactions executed between the current (February) and prior month (January 2025) revealed that total domestic transactions decreased by 12.8 per cent from N535.5 billion in January 2025 to N466.8 billion in February 2025.
Similarly, total foreign transactions decreased by 40.4 per cent from N71.5 billion to N42.7 billion between January 2025 and February 2025.
Institutional Investors outperformed retail investors by eight per cent. A comparison of domestic transactions in the current (February) and prior month (January 2025) revealed that retail transactions decreased by 19.8 per cent from N267.4 billion in January 2025 to N214.5 billion in February 2025.
In this vein, the institutional composition of the domestic market decreased by 5.9 per cent from N268.2 billion in January 2025 to N252.3 billion in February 2025.
Over 18 years, domestic transactions increased by 33.2 per cent from N3.6 trillion in 2007 to N4.7 trillion in 2024; whilst foreign transactions also increased by 38.3 per cent from N616 billion to N852 billion over the same period.
