Stock Market Transactions Decline By N97.58bn In February

Total transactions from both domestic and foreign equity trading on the Nigerian Exchange Limited declined by N97.58 billion in February, 2025.

This was contained in the Domestic and Foreign Portfolio Transactions Report as at February 28, 2025.

The total transactions at the Exchange fell from N607.05 billion in January 2025 to N509.47 billion in February 2025. This shows a 16.07 per cent or N97.58 billion decline in total market transactions for February 2025, reflecting a slowdown in trading activity compared to the previous month.

Despite this month-on-month drop, the market showed remarkable improvement on a year-on-year basis, with total transactions in February 2025 rising by 42.36 per cent from the N357.88 billion recorded in February 2024.

A deeper analysis of investor participation in February 2025 revealed that domestic transactions accounted for the lion’s share of market activity, despite experiencing a 12.83 per cent decline from N535.54 billion in January to N466.82 billion in February.

Foreign investor participation, on the other hand, saw a much steeper drop of 40.36 per cent, plummeting from N71.51 billion in January to N42.65 billion in February. This sharp decline in foreign transactions reflects ongoing concerns about macroeconomic headwinds, foreign exchange volatility, and geopolitical uncertainties that have deterred foreign participation in Nigeria’s equities market.

Further analysis showed that institutional investors outperformed retail investors by eight per cent. A comparison of domestic transactions in the current and prior month (January 2025) revealed that retail transactions decreased by 19.76 per cent from N267.35 billion in January 2025 to N214.51 billion in February 2025. Similarly, the institutional composition of the domestic market decreased by 5.92 per cent from N268.19 billion in January 2025 to N252.31 billion in February 2025.

Looking at historical trends, the data indicated that domestic investor participation has been on a steady upward trajectory over the last two decades. Domestic transactions grew by 33.15 per cent, rising from N3.556 trillion in 2007 to N4.735 trillion in 2024, reflecting increased confidence and participation from local investors.

During the same period, foreign transactions also saw an increase of 38.31 per cent, from N616 billion to N852 billion, though the share of foreign participation remained significantly lower compared to domestic investment.

In 2024, domestic transactions accounted for 85 per cent of total market transactions, while foreign transactions contributed 15 per cent. This trend has continued into 2025, with domestic transactions totaling N1.002 trillion so far, while foreign transactions remain significantly subdued at approximately N114.16 billion.

Cowry Assets Management Limited noted that the growing self-reliance of the Nigerian equities market, as local investors continue to drive market activity amid dwindling foreign participation, saying “the consistent dominance of domestic investors suggests that confidence in the local bourse remains strong, even as foreign investors adopt a more cautious stance due to external uncertainties.

“With domestic institutional investors maintaining a significant presence, the NGX may continue to see sustained market stability, albeit with some volatility influenced by macroeconomic factors.”