Foreign investors’ participation in the Nigerian stock market has waned, with outflows surpassing inflows by 12.2% year-to-date as of November 2024. The Nigerian Exchange Limited (NGX) data revealed a foreign investment outflow of ₦415.13 billion, exceeding the inflow of ₦370.15 billion. Month-on-month (MoM), foreign portfolio inflows dropped by 22.4% to ₦25.85 billion in November, compared to ₦33.31 billion in October. This decline is attributed to investors shifting to high-yield debt securities. Concurrently, foreign outflows increased slightly by 6.6% MoM to ₦15.09 billion in November.
Overall, transactions on the Nigerian stock market declined by 12% MoM, from ₦502.73 billion in October to ₦442.34 billion in November. Domestic transactions dominated, accounting for 82% of total trades, although these also decreased by 11.83% from ₦455.27 billion to ₦401.40 billion. Retail investor activity grew by 14.9%, but institutional investment saw a significant decline of 27.77%. Foreign transactions, representing just 9.3% of gross transactions, fell by 13.74% over the same period.
Market analysts at Cordros Research attribute the reduced participation to elevated yields in the fixed-income market, which attract both foreign and domestic investors away from equities. The ongoing geopolitical tensions and economic uncertainty further constrain foreign portfolio investment (FPI) participation. Analysts expect domestic investors to remain the dominant contributors to transaction volumes, though buying activities are likely to stay subdued due to the preference for fixed-income investments.