Domestic transactions on the Nigerian Exchange Limited (NGX) saw a notable rise, reaching ₦2.498 trillion within the first seven months of 2024, vastly exceeding foreign transactions, which totaled ₦598 billion during the same period.
This information was disclosed in the NGX’s July 2024 Domestic and Foreign Portfolio Investment report. The data showed that domestic investors outperformed their foreign counterparts by ₦1.9 trillion, marking a 317.73% increase in domestic transaction activity compared to foreign transactions.
The increase in domestic participation is attributed to foreign investors pulling back due to the country’s economic uncertainties. Traditionally, foreign portfolio investors tend to lower their involvement in markets experiencing volatility.
As of July 31, 2024, total transaction value on the NGX rose by 38.66%, jumping from ₦354.55 billion ($241.06 million) in June 2024 to ₦491.61 billion ($305.02 million) in July.
Despite this monthly growth, the year-on-year comparison revealed a 30.07% decline from July 2023, when transactions totaled ₦702.98 billion.
For July 2024, domestic investors contributed approximately 76% of the total transaction value, once again outpacing foreign investors.
A closer look at the data between June and July 2024 indicated a 59.38% rise in domestic transactions, increasing from ₦272.36 billion in June to ₦434.09 billion in July. In contrast, foreign transactions dropped by 30.02%, falling from ₦82.19 billion ($55.88 million) to ₦57.52 billion ($35.69 million) over the same period.
Retail investors, in particular, played a significant role in this growth. Their transaction volume surged by 138.48%, from ₦114.02 billion in June to ₦271.92 billion in July.
Meanwhile, institutional investors saw a smaller increase of 2.42%, from ₦158.34 billion to ₦162.17 billion during the same time.
Looking at long-term trends, domestic transactions on the NGX have experienced a 10.94% decline over the past 17 years, dropping from ₦3.56 trillion in 2007 to ₦3.167 trillion in 2023. Foreign transactions saw a sharper decline of 33.28%, falling from ₦616 billion to ₦411 billion during the same period.
By the end of 2023, domestic transactions accounted for 89% of the total activity on the NGX, with foreign transactions making up just 11%.
