The Nigerian Exchange Limited (NGX) witnessed a sharp decline in trading activity in February 2025, as total transactions fell by 16.07 percent to N509.47 billion, down from N607.05 billion recorded in January. The decline was largely driven by a 40.36 percent slump in foreign investor transactions, which dropped from N71.51 billion to N42.65 billion during the period.
According to the NGX Domestic and Foreign Portfolio Investment Report released on Monday, foreign inflows fell by 29.67 percent to N18.05 billion, compared to N25.66 billion in January, while foreign outflows recorded an even steeper 46.33 percent decline, dropping from N45.85 billion to N24.60 billion. This downturn reduced foreign participation in the market to 8.37 percent, down from 11.78 percent in the previous month, further reinforcing the dominance of domestic investors.
Market Trends and Domestic Investor Activity Despite maintaining control of 91.63 percent of total transactions, domestic investors also saw a slowdown, as trading volume declined by 12.83 percent from N535.54 billion in January to N466.82 billion in February.
Breaking down domestic transactions:
Retail investors contributed N214.51 billion, marking a 19.76 percent drop from N267.35 billion recorded in January.
Institutional investors accounted for N252.31 billion, a 5.92 percent decline from N268.19 billion.
The steady withdrawal of foreign investors raises concerns over confidence in Nigeria’s capital market, despite ongoing policy efforts to bolster economic stability.
Cumulative Transactions and Market Outlook For the first two months of 2025, total transactions amounted to N1.12 trillion, with domestic investors contributing N1 trillion (89.78 percent) and foreign investors accounting for N114.16 billion (10.22 percent). This represents a 10.62 percent increase in overall market activity compared to the same period in 2024, when transactions totaled N1.01 trillion. However, foreign participation continues to wane, sliding from 11.78 percent in 2024 to 10.22 percent in 2025.
Long-Term Market Trends Over the past 18 years, domestic participation in the Nigerian equities market has grown by 33.15 percent, rising from N3.56 trillion in 2007 to N4.73 trillion in 2024. During the same period, foreign transactions increased by 38.31 percent, from N616 billion to N852 billion. Despite this, foreign participation has remained low, averaging 15 percent of total transactions in 2024, while domestic investors controlled 85 percent of the market.
The continued exit of foreign investors, with N455.62 billion withdrawn from the Nigerian stock market in 2024, highlights persistent concerns over investor confidence. This trend persists despite efforts by the Central Bank of Nigeria (CBN) to stabilize the naira and enhance market attractiveness.
