By the end of May, the total amount of transactions on the local exchange had reached N2.35 trillion, a rise of 115.40 percent over the first five months of 2023.
This was revealed in the Nigerian Exchange Limited’s report on domestic and international portfolio involvement in stock trading, which was made public on Thursday.
The research claims that local investors continued to dominate the market, transacting around N1.79tn (79.63%) during the five months as opposed to N458.29bn (20.37%) for foreign investors.
An additional analysis revealed that domestic institutional investors held a N906 billion advantage over domestic retail investors, with N885.19 billion.
Following a leadership transition in May 2023, Nigeria underwent significant reforms, such as the removal of fuel subsidies and the harmonisation of the foreign exchange market. Experts predicted that these measures would strengthen the country’s capital market and entice foreign investors to return.
The Monetary Policy Rate was raised several times throughout this time, reaching 26.25 percent at the May 2024 MPC meeting.
PwC, in its Nigeria economic outlook, titled, ‘Navigating economic reforms,’ said, “The Nigerian Stock Exchange recorded an increase of 85.2 per cent in market capitalisation from N30.3tn in May 2023 to N56.5tn in
May 2024.
The oil and gas (14%), consumer goods (104%), insurance (88%), and banking (69%), sectors all performed well on the sectoral index, contributing to the gain.
“The Nigeria 10-Year Government Bond Yield reached an all-time high
of 19.30 per cent in May 2024 from 14.55 per cent in May 2023. The increase in bond yields is due to attractive rates on OMO and treasury bills, spurred by the rise in the MPR.”
According to NGX, overall transactions increased by 2.64 percent from N346.23 billion in April to N355.38 billion in May.
Domestic investors, whose participation climbed by 2.53% from N225.40 billion in April 2024 to N231.10 billion in May 2024, were a major factor in the increasing activity on the local exchange.
Institutional investors did better than individual investors in April and May, gaining 2% of the total, from N117.57 billion to N113.53 billion.
Between April and May of 2024, the total amount of foreign transactions rose by 2.86 percent, from N120.83 billion to N124.28 billion.
