…transactions largely driven by domestic investors

Trading activity on the Nigerian Exchange Limited in the first quarter of 2026 signals a clear transition in market structure, with a more stable and domestically anchored investor base replacing the sharp, foreign-driven volatility that characterised the same period in 2025.

Latest data on domestic and foreign portfolio investment flows show that total market turnover rose significantly in Q1 2026 to about N3.607 trillion, compared with N2.232 trillion recorded in Q1 2025. However, beyond the growth in value, the more notable development lies in the changing pattern of participation, as foreign inflows became more gradual and less disruptive. In Q1 2025, trading activity was marked by pronounced swings in investor composition.

Domestic investors dominated the market at the start of the year, accounting for 88.22 per cent of total transactions in January and 91.63 per cent in February. During this period, foreign participation remained subdued, contributing just 11.78 per cent and 8.37 per cent respectively.

That trend reversed dramatically in March 2025, when foreign investors surged into the market. Transactions by offshore investors rose to N699.89 billion, accounting for 62.74 per cent of total trades, compared to N415.62 billion or 37.26 per cent recorded by domestic investors.

The sudden shift, largely attributed to block trades, underscored the episodic nature of foreign participation and the market’s vulnerability to sharp external flows. Despite this volatility, domestic investors still accounted for the larger share of Q1 2025 activity at N1.418 trillion or 63.53 per cent, while foreign transactions totalled N814.05 billion, representing 36.47 per cent.

By contrast, Q1 2026 reflects a more consistent and domestically driven structure, even as foreign investors gradually re-entered the market. In January 2026, domestic investors accounted for 86.76 per cent of total transactions valued at N861.97 billion, while foreign participation stood at 13.24 per cent.

The pattern strengthened in February, with domestic share rising to 90.99 per cent as foreign participation eased to 9.01 per cent. The divergence between both periods becomes most evident in March. While March 2025 was dominated by an outsized foreign inflow, March 2026 recorded a more measured increase in offshore activity.

Foreign participation rose to 16.56 per cent, but remained significantly below domestic transactions, which accounted for 83.44 per cent of the market. In value terms, foreign transactions in March 2026 more than doubled, increasing by 107.74 per cent from N139.03 billion in February to N288.82 billion.

However, unlike in the previous year, this surge did not displace domestic investors, who maintained clear control with transactions of about N1.455 trillion. Market turnover also strengthened in March 2026, rising by 13.10 per cent to N1.744 trillion, compared with N1.155 trillion in March 2025, pointing to improved liquidity conditions and broader investor participation.

Cumulatively, domestic investors accounted for N3.059 trillion of total transactions in Q1 2026, representing 84.83 per cent, while foreign investors contributed N0.542 trillion or 15.06 per cent. This marks a notable shift from 2025, when foreign participation was significantly higher due to the March spike.

Analysts say the contrasting patterns reflect an evolving market dynamic. While 2025 was driven by sudden and concentrated foreign inflows likely linked to tactical positioning and foreign exchange adjustments 2026 demonstrates a more orderly re-entry of offshore investors alongside a resilient domestic base.