Domestic transactions on the Nigerian Exchange reached N3.73tn year-to-date in October, accounting for 83.35 per cent of total market activity.
In October, total transactions amounted to N502.73bn, a 1.97 per cent increase from N493.01bn in September. Domestic transactions made up N455.27bn, which represents 90.56 per cent of the total market activity in the month.
Breaking down the domestic transactions, institutional investors led the way with N285.23bn, while retail investors contributed N170.04bn. This shows that institutional investors were the primary drivers of domestic market participation, although retail investors also maintained a strong presence.
When comparing the performance from September to October, domestic transactions saw an increase of 0.81 per cent, from N451.60bn to N455.27bn. Despite this rise, domestic activity continued to outpace foreign investor participation by a significant margin.
The growth in domestic transactions was underpinned by institutional investors, who recorded a robust N285.23bn, while retail investors saw a contribution of N170.04bn.
Year-on-year, October total transactions were up by 127.54 per cent from N220.94bn recorded in October 2023, further highlighting the growing dominance of domestic investors. The performance of the domestic sector has been a driver of this upward trend, with domestic transactions outpacing foreign transactions over the past year.
For the full year, total transactions have increased from N2.93tn in 2023 to N4.47tn as of October. Domestic transactions accounted for N3.73tn, maintaining a hold on the market with an 83.35 per cent share of total activity.
Foreign transactions, though smaller in comparison, also showed an increase. In October, foreign inflows stood at N33.31bn, while foreign outflows were recorded at N14.15bn, bringing the total foreign transactions for the month to N47.46bn.
This represents a 14.61 per cent increase from September when foreign transactions amounted to N41.41bn. Despite the growth, foreign investors still accounted for only 9.44 per cent of total market activity in October, continuing to play a secondary role compared to domestic investors.
Overall, the foreign inflows and outflows for October indicate continued foreign interest in the Nigerian market, with inflows surpassing outflows. However, foreign participation remains limited when compared to the contribution of domestic investors to the overall market activity.
For the year-to-date performance, foreign transactions this year reached N744.34bn, representing 16.65 per cent of total market activity. While foreign participation has seen a slight uptick compared to 2023, when foreign transactions were N291.38bn, domestic investors continue to drive the market’s growth and performance.
Looking at longer-term trends, the data reveals a shift in market dynamics. Over a 17-year period, from 2007 to 2023, domestic transactions decreased by 10.94 per cent, from N3.56tn in 2007 to N3.17tn in 2023.
Also, foreign transactions fell by 33.28 per cent, from N616bn to N411bn during the same period. Despite this, domestic transactions accounted for 89 per cent of total market activity in 2023, underscoring the continued dominance of local investors in the NGX.
The PUNCH reported that foreign inflow into the Nigerian Exchange Limited declined to the lowest point of the year at N11.26bn in September. Foreign inflow into Nigeria in the first nine months of 2024 stood at N310.99bn higher than N108.93bn in 2023. The highest value of inflow was recorded in May 2024, N54.87bn, and it has steadily declined since then to N11.26bn in September.
