Local investors’ participation in equities hits N4.73tr in one year

Domestic investors in Nigeria’s equities market recorded a significant milestone in 2024, with transactions reaching an impressive N4.73 trillion.

It was far higher than foreign investors’ participation, which stood at N852 billion during the same period.

The Nigerian Exchange Limited (NGX) December 2024 report released yesterday revealed a marginal 52.3 per cent increase in total transactions from N442 billion in November 2024 to N673 billion in December 2024, with domestic investors accounting for 85 per cent of the year’s total transactions.

The dominance marked a sharp contrast to the 15 per cent contribution by foreign investors. In December 2024, domestic investors executed transactions worth nearly 80 per cent more than their foreign counterparts, underscoring a growing trend of local participation.

Year-on-year comparison also showed a remarkable 95.9 per cent increase in transactions, from N343.9 billion in December 2023 to N673 billion in December 2024. Institutional investors outperformed retail investors by 34 per cent in December 2024.

Retail transactions in December 2024 rose by 2.81 per cent to N200.9 billion from N195.38 billion in November, while institutional transactions surged by 97.09 per cent to N406 billion from N206 billion within the same period.

Over 18 years, domestic transactions have grown by 33.15 per cent from N3.6 trillion in 2007 to N4.74 trillion in 2024, while foreign transactions increased by 38.3 per cent from N616 billion to N852 billion.

Managing Director of Arthur Stephen Asset Management Limited, Olatunde Amolegbe described the local investors’ sustained dominance as a positive departure from over-reliance on foreign portfolio investors, which often fueled market volatility.

He noted that the growing dominance of local retail and institutional investors is creating a more stable and reliable market.

“Markets dominated by local institutional investors provide a solid base and reduce volatility.”

Also, the President of the Independent Shareholders Association of Nigeria, Moses Igbrude, described the development as encouraging. He attributed the rise in domestic participation to increased awareness, adding that foreign investors remain cautious due to concerns over exchange rate instability, fund repatriation, and global economic uncertainties.

“It is great news that local investors have developed confidence in the Nigerian capital market. This reflects improved performance and returns, as well as a growing realisation of the importance of investing in the market.”

The rising involvement of local investors signals a promising future for the Nigerian equities market, laying a solid foundation for sustainable growth and reduced reliance on volatile foreign investments.