NGX: Portfolio investment sheds 16.07% to N509bn in Feb with domestic investors’ dominance

Bamidele Famoofo

Figures obtained from the Nigerian Exchange Limited at the weekend indicated that total domestic and foreign portfolio transactions fell from N607.05 billion (approximately $410.84 million) in January 2025 to N509.47 billion (approximately $341.36 million) in February 2025.

This shows a 16.07 percent 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 percent from the N357.88 billion recorded in February 2024.

The data further underscores the dominant role played by domestic investors, whose activity in February 2025 outpaced that of foreign investors by an overwhelming 84 percent. A deeper analysis of investor participation in February 2025 reveals that domestic transactions accounted for the lion’s share of market activity, despite experiencing a 12.83 percent 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 percent, plummeting from N71.51 billion ($48.38 million) in January to N42.65 billion ($28.57 million) 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. Within the domestic segment, institutional investors continued to dominate over retail investors, holding an 8 percent advantage in transaction value. However, both institutional and retail investors saw a decline in activity. Retail transactions dropped by 19.76 percent, from N267.35 billion in January to N214.51 billion in February, suggesting a pullback from smaller individual investors.

Meanwhile, institutional transactions declined by 5.92 percent, moving from N268.19 billion to N252.31 billion, highlighting a more measured approach by fund managers and large institutional players in response to evolving market conditions. Looking at historical trends, the data indicates that domestic investor participation has been on a steady upward trajectory over the last two decades. Domestic transactions grew by 33.15 percent, 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 percent, 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 percent of total market transactions, while foreign transactions contributed a mere 15 percent. This trend has continued into 2025, with domestic transactions totalling N1.002 trillion so far, while foreign transactions remain significantly subdued at approximately N114.16 billion.

Reacting to the situation, stock market experts at Cowry Research noted, “The growing self-reliance of the Nigerian equities market, as local investors continue to drive market activity amid dwindling foreign participation. 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.”

Generally, investment activities on the Nigerian Exchange witnessed a slowdown beginning from the last trading day in February as it recorded a four-week straight loss, causing investors to lose over N1.37 trillion as of March 21, 2025.

Equities however staged a comeback in the trading week in March as the NGX All-Share Index and Market Capitalization appreciated by 0.66 percent to close the week at 105,660.64 and N66.257 trillion respectively. Similarly, all other indices finished higher except for NGX Oil/Gas and NGX Commodity Indices which depreciated by 1.65 percent and 0.76 percent respectively while the NGX AseM index closed flat.

A total turnover of 7.521 billion shares worth N398.949 billion in 61,312 deals was traded in the review week ended March 28, 2025, by investors on the floor of the Exchange, in contrast to a total of 2.902 billion shares valued at N48.064 billion  which exchanged hands the preceding week in 57,044 deals.

The Industrial Goods (measured by volume) led the activity chart with 4.923 billion shares valued at N331.999 billion traded in 2,969 deals; thus contributing 65.46 percent and 83.22 percent to the total equity turnover volume and value respectively. The Financial Services industry followed with 2.092 billion shares worth N 31.744 billion in 32,421deals. Third place was the Services Industry, with a turnover of 198.775 million shares worth N788,669 million in 3,450 deals. Trading in the top three equities namely Lafarge Africa Plc, Sovereign Trust Insurance Plc and Cutix Plc (measured by volume) accounted for 5.546 billion shares worth N332.381 billion in 1,300 deals, contributing 73.73 percent and 83.31 percent to the total equity turnover volume and value respectively.

Forty-three (43) equities appreciated in price during the week, higher than thirty-two (32) equities in the previous week. Thirty-six (36) equities depreciated in price, lower than forty-eight (48) in the previous week, while seventy-one (71) equities remained unchanged, lower than seventy (70) recorded in the previous week.