Foreign Appetite for Nigerian Stocks Wanes as 9-month Outflow Hits N385.9 Billion

Foreign investors are increasingly losing appetite in the Nigerian stock market as activities in the first nine months of the year shows withdrawal of investment.

During the period, portfolio investors invested N310.99 billion on stocks even as they sold off more equities worth N385.89 billion, amounting to a net foreign outflow of N72.9 billion.

In the nine-month period under review, the Nigerian Exchange recorded N3.968 trillion in equities trading and this was primarily driven by strong domestic investor participation

The while the figure represents a remarkable increase from the N2.712 trillion worth of stocks traded during the same period in 2023, foreign investors contributed the least while domestic counterparts continued to dominate the space.

Expatriates in the market were responsible for just N696.88 billion, accounting for 17.56% of the total value of stocks traded, while domestic investors dominated the market with N3.271 trillion, or 82.44% of total trading volume

The latest Foreign Portfolio Investment report highlights the performance of domestic investors, with retail investors trading N1.739 trillion worth of stocks and institutional investors contributing N1.531 trillion during the nine-month period.

Investments in September 2024

In September 2024, total transactions on the Nigerian Exchange saw a month-on-month increase of 29.90%, rising from N379.52 billion (approximately $237.70 million) in August to N493.01 billion (about $307.84 million).

This is a notable improvement compared to September 2023, where total transactions were valued at N295.80 billion, marking a 66.67%t increase year-on-year.

In September 2024, domestic investors outperformed foreign investors, executing transactions valued at 84% more than their foreign counterparts.

Domestic transactions rose significantly, with total domestic trading increasing by 40.23% from N322.05 billion in August to N451.60 billion in September.

Conversely, foreign transactions saw a decline of 27.95%, dropping from N57.47 billion (about $35.99 million) in August to N41.41 billion (approximately $25.86 million) in September.

The report also indicates that retail investors surpassed institutional investors, outperforming them by 28%.

A closer look at the domestic market reveals that retail transactions increased by 59.42 percent, from N180.72 billion in August to N288.10 billion in September, while institutional transactions rose by 15.6%, from N141.33 billion to N163.50 billion during the same period.