Domestic, Foreign Portfolio Equities Transactions Hit N4.91trn In 11Months

The total domestic and foreign portfolio transactions in Nigeria’s equity market amounted to N4.913 trillion from January to November 2024.

This was revealed in the latest Domestic and Foreign Portfolio Investment report. Monthly, NGX polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

The report revealed that strong market dynamics spur inflows into equities to historic N4.91 trillion heights since 2007, showing a remarkable surge in both foreign and domestic transactions throughout 2024.

By the end of November, the total transaction value had reached an impressive N4.91 trillion, reflecting a significant 51.92 per cent year-on-year increase from N3.23 trillion recorded in November 2023.

Notably, this marks a new historic peak, surpassing the previous high of N3.97 trillion recorded in 2007.

Analysts noted that “the growth in transaction volume can be attributed to the increasing appeal of Nigerian equities, which have garnered strong interest from investors despite the positive performance of fixed-income and money markets.

“This development comes against the backdrop of the Central Bank of Nigeria’s (CBN) tightened monetary policy, which saw interest rates rise by over 800 basis points in 2024. Even with these headwinds, the local equities market has continued to demonstrate resilience and attract sustained investor confidence.”

Further analysis showed that of the N4.91 trillion recorded so far, domestic investors have maintained their dominance, accounting for more than 84 per cent of total transactions, equivalent to N4.13 trillion.

Foreign investors, meanwhile, contributed N785.3 billion, representing 16 per cent of the total. This trend underscores the steadfast participation of local investors in Nigerian equities, even as other asset classes offer competing opportunities.

However, analysts noted that “foreign investor participation has remained below 25 per cent since the pandemic. Factors such as market risks and capital control measures implemented by the CBN have played a role in limiting foreign inflows into the market.”

On a monthly basis, the local bourse recorded N442.3 billion in transactions during November 2024. Domestic investors led the way with N401.4 billion, while foreign investors contributed N40.94 billion.

This monthly figure, though lower than October’s N502.7 billion by 12.01 per cent, represents a robust 47.12 per cent year-on-year growth from the N300.7 billion recorded in November 2023.

Analysts added that “the continued strength of domestic participation highlights the enduring confidence of local investors in the market.”

Cowry Asset Management Limited stated that “looking ahead to 2025, there is optimism for a modest increase in market activity from both local and foreign investors. Strong investor sentiment and a favourable outlook for Nigerian equities are expected to drive this growth. However, the vibrant fixed-income and money markets, which offer attractive yields, may present competition for investor attention.

“As the new year approaches, the interplay between these asset classes will be pivotal in shaping the investment landscape. Nevertheless, the Nigerian equities market remains well-positioned to attract sustained interest from a broad spectrum of investors.”