The Nigerian Exchange (NGX) recorded a total transaction value of N502.73 billion (approximately $300.05 million) in October 2024, driven by both domestic and foreign portfolio investments. This represents a modest 1.97% increase compared to N493.01 billion ($307.84 million) in September, marking the highest monthly performance in the second half of the year.
Despite the depreciation of the Naira from N1,601.52/$1 in September to N1,675.49/$1 in October, which resulted in a lower dollar valuation, the transaction figure remains significant. It ranks as the third-highest monthly performance in 2024, behind March (N538.54 billion) and January (N651.52 billion). Year-to-date (YTD) data shows a total of N4.47 trillion ($2.67 billion) in transactions, the second-highest annual figure in the past 17 years, surpassed only by 2007.
Domestic Investors Dominate Market Activity
Domestic investors continued to lead the market, accounting for N455.27 billion ($272.25 million), or 90.56% of total transactions in October. This marked a slight increase from N451.6 billion ($281.98 million) in September. The dominance of domestic investors was largely driven by institutional participation, which surged by 74.45% from N163.5 billion ($101.99 million) to N285.23 billion ($170.14 million) in October.
In contrast, domestic retail participation declined sharply by 40.98%, from N288.1 billion ($180 million) to N170.04 billion ($101.42 million) over the same period.
Foreign Investors Show Modest Recovery
Foreign portfolio investments (FPI) contributed N47.46 billion ($28.33 million), a 14.61% increase from N41.41 billion ($25.86 million) in September. However, foreign participation remains limited, accounting for just 9.44% of total transactions. Foreign inflows in October stood at N33.31 billion ($19.87 million), compared to N14.15 billion ($8.45 million) in outflows, resulting in a positive net inflow.
Despite high interest rates offered by the Central Bank of Nigeria (CBN) to attract foreign capital, the NGX market has not fully capitalized on these measures, with foreign investor participation still subdued due to ongoing macroeconomic challenges, including currency volatility and uncertainties around fiscal and monetary policies.
Year-on-Year Growth and Market Resilience
October’s transaction value reflects a significant year-on-year growth of 127.54%, compared to October 2023, when transactions were valued at N220.94 billion ($138 million). YTD, domestic investors have contributed N3.73 trillion ($2.23 billion), or 83.35% of total market activity, while foreign investors have contributed N744.34 billion ($445 million), or 16.65%.
This marks a trend of growing reliance on domestic capital, as foreign transactions have declined by 33.28% since 2007, while domestic transactions have only seen a 10.94% decline over the same period.
Despite challenges such as currency devaluation and reduced foreign investor interest, the NGX All-Share Index rose by 0.25% in October, boosting the market’s YTD gain to an impressive 32%, showcasing resilience amid macroeconomic volatility.