Domestic Investors Dominate NGX with N3.4tn in Trades Amid Rising Confidence
Domestic investors have emerged as the dominant force on the Nigerian Exchange Limited (NGX), driving a total of N3.41 trillion in equity transactions within the first five months of 2025. This performance has significantly outpaced that of foreign portfolio investors, who accounted for only N996.03 billion, or 29.17% of the total. According to the NGX’s latest Domestic and Foreign Portfolio Investment Report, domestic players contributed 70.83% of trading activity, underscoring their growing influence in the capital market.
May 2025 saw a remarkable surge in market activity, with equity transactions jumping by 45.32% to N700.50 billion from N482.04 billion in April. Domestic investors led this upswing, injecting N581.59 billion into the market—a 38.81% increase month-on-month. Meanwhile, foreign participation also climbed by 88.54%, rising to N118.91 billion from N63.07 billion in April. This rebound is being attributed to improving macroeconomic conditions and currency market reforms that are gradually restoring foreign investor confidence.
Within the domestic investment segment, retail investors outperformed institutional players. Retail trading activity surged by a staggering 86.12%, from N181.31 billion in April to N337.46 billion in May. Institutional investor transactions also experienced modest growth, increasing by 2.72% to N244.13 billion. This shift reflects a growing trend of individual participation, fueled by easier access to trading platforms and increased financial literacy.
A year-on-year comparison indicates a significant boost in investor confidence. Total equity transactions in May 2025 nearly doubled, rising by 97.11% compared to N355.38 billion recorded in May 2024. Likewise, the year-to-date trading volume has increased by over 51% from the N2.25 trillion recorded in the same period last year. Analysts attribute this upswing to ongoing economic reforms, including tighter monetary policy and efforts to stabilize the naira.
Over the longer term, domestic market participation has expanded by 33.15% in 18 years, growing from N3.56 trillion in 2007 to N4.74 trillion in 2024. In the same period, foreign transactions rose by 38.31%, from N616 billion to N852 billion. The NGX credits this sustained growth in local trading to improved investor education, digital onboarding processes, and supportive regulatory reforms. Notably, despite a sharp 90.99% drop in foreign activity in April, May’s rebound suggests that both local and offshore investors are responding positively to the evolving market landscape.
Source: Punch