Participation of domestic and foreign portfolios in stock trading increased by 1.97%

The Nigerian stock market has witnessed a 1.97% increase in total domestic and foreign equity trading participation, reaching N502.73 billion as of October 2024, according to a report by the Nigerian Exchange Limited (NGX).

The N502.73 billion recorded in October 2024 represents a marginal increase of 1.97% month-on-month (MoM) from the N493.01 billion in September 2024.

On a year-on-year (YoY) basis, October investment transactions mark a significant increase of 127.54% from October 2023’s N220.94 billion.

Domestic investors accounted for N466.27 billion, or 90.56 percent of the total, while foreign investors contributed N47.46 billion, or 9.44 percent. This highlights the significant dominance of local investors, whose participation exceeded that of foreign investors by 859.27%.

Domestic investment dominates market activity

Domestic transactions:

Total domestic investment participation increased marginally by 0.81% or N3.67 billion month-on-month from N451.60 billion in September 2024.

Year-on-year, domestic investment transactions soared by 142.71 per cent or N267.69 billion from N187.58 billion in October 2023.
For the month of October, institutional investors were the dominant players, contributing N285.23 billion (67.74%), compared to N170.04 billion for retail investors in the same month.
On a monthly basis, institutional investors significantly outperformed. Retail investment transactions declined sharply by 40.98 per cent from N288.10 billion in September. While institutional investment transactions jumped 74.45% from N163.50 billion in the previous month.

Overseas Operations:

The participation of foreign investors increased by 14.61% or N6.05 billion from N41.41 billion in September to N47.46 billion in October 2024.

On an annual basis, foreign investment transactions increased by 42.27% or N14.10 billion from N33.36 billion in October 2023.
October recorded the highest net foreign equity investment inflows this year, amounting to N19.16 billion. Earlier in the year, total foreign investment transactions in April and May exceeded those in October, but net inflows in these months were lower than in October due to outflows exceeding the entries.
Total foreign inflows stood at N33.31 billion, while outflows totaled N14.15 billion.

Cumulative investment operations for 2024

During the first 10 months of 2024, foreign investment in equities declined with total outflows exceeding inflows by 13.93% or N55.74 billion.
Foreign capital inflows stood at N344.30 billion, while outflows reached N400.04 billion as investors appeared to be selling for profits.
For domestic investors during the same period, retail participation exceeded institutional transactions by 5.14 per cent, or N93.35 billion.
Total investment by individuals stood at N1.9 trillion, compared to N1.81 trillion from institutional investors.

Implications for the market

The disparity between domestic and foreign participation highlights the growing reliance on local investors to drive activity in the Nigerian stock market.
The steady increase in institutional investment reflects growing confidence among domestic stakeholders, while low foreign participation reflects cautious optimism amid global economic uncertainties.
This trend reflects the changing dynamics of the Nigerian stock market, where domestic investors continue to dominate, supported by a combination of local institutional and retail players.