NGX climbs to N2.25tn in five months’ total transactions amid surging market revival

Onome Amuge

A surge of financial energy has been reflected on the Nigerian Exchange Limited (NGX), as the  latest domestic and foreign portfolio participation in equity trading report released by the NGX showed that total transactions on the local bourse reached N2.35 trillion at the end of May 2024, a 115.40 percent increase compared to the same period in the previous year, showcasing a high level of investor confidence and a hunger for opportunity within the Nigerian capital market.

According to the report, a sea of local investors flooded the Nigerian market, asserting their dominance with an impressive N1.79 trillion in transactions, occupying a commanding 79.63 percent share in the first five months of 2024. Meanwhile, foreign investors, struggling to gain a foothold, generated just 20.37 percent, or N458.29 billion, in market activity.

The domestic market witnessed a battle for dominance, where institutional investors wielded their financial might with N906 billion in transactions, outpacing retail counterparts. Despite this, the retail investors put up a strong fight, capturing N885.19 billion in market activity, a reflection of the critical role they play in the Nigerian economy.

Following a leadership change in May 2023, Nigeria’s new administration enacted several critical reforms, which some experts believe will revitalise the country’s capital markets and attract international investment. 

The harmonisation of the foreign exchange market especially, is anticipated to fuel market growth and encourage foreign investors to return to Nigeria, according to industry analysts.

The NGX reported a rise in total transactions in May 2024, with a 2.64 percent increase from N346.23bn in April to N355.38 billion, indicating a surge in activity on the domestic market. Spearheading this growth were domestic investors, who displayed a  2.53 percent increase in participation, from N225.40 billion in April to N231.10 billion in May.

While the overall trend in the Nigerian capital market was marked by growth in May 2024, institutional investors emerged as the clear winners, outshining their retail counterparts by two percent. Institutional investors saw a surge in transactions, reaching N117.57 billion in May, while retail investors lagged slightly behind at N113.53 billion.

As the Nigerian capital market experienced a surge in activity between April and May 2024, international investors displayed a notable increase in transactions, growing by 2.86 percent during the period in review. This uptick was evidenced by total foreign transactions reaching N124.28 billion in May 2024, a significant rise from the N120.83 billion recorded in April 2024.