Domestic Investors Slash Stock Trades by N932bn in August as Foreign Participation Rises

Domestic investors on the Nigerian Exchange Limited (NGX) sharply reduced their participation in August 2025, cutting back on stock trades by a staggering N932 billion compared to July. The latest NGX Domestic and Foreign Portfolio Investment Report revealed that total domestic transactions plunged by 55.87 per cent, dropping from N1.67 trillion in July to just N736.57 billion in August. The steep pullback dragged overall market activity down by nearly half.

Analysts say the slump was largely due to the absence of block trades—large one-off transactions that significantly boosted volumes in July. Without those deals, institutional investors slashed their trades by 65.9 per cent to N392.9 billion, while retail investors scaled back by 33.5 per cent to N343.67 billion. Despite the slowdown, institutions still accounted for a slim majority of activity at 53 per cent, underscoring their outsized influence on the Nigerian stock market.

Interestingly, foreign investors bucked the trend, increasing their trading activity by 17.7 per cent month-on-month. Their total transactions rose to N171.8 billion in August, with inflows of N95.1 billion and outflows of N76.7 billion, signaling relatively balanced sentiment. As a result, foreign participation nearly doubled to 18.9 per cent of total trades in August, up from just 8 per cent the previous month.

Year-on-year comparisons, however, paint a more positive picture. Domestic activity in August 2025 was still 139 per cent higher than the N379.5 billion recorded in August 2024. Between January and August, local investors traded N5.46 trillion compared to N1.45 trillion by foreign investors, highlighting that Nigerians still accounted for nearly 80 per cent of market activity this year. Over the past 18 years, domestic investors have consistently provided liquidity, with transactions rising from N3.56 trillion in 2007 to N4.73 trillion in 2024.

Market observers stress that the August decline should not be mistaken for weak fundamentals. Instead, it reflects the distortions caused by large block deals that inflated July’s numbers. With the naira trading relatively stable—moving only slightly from N1,533.55/$ in July to N1,531.57/$ in August—analysts believe foreign inflows could strengthen further. Still, the exchange remains heavily reliant on domestic institutional investors whose monthly trades can swing the market by hundreds of billions of naira.

source: punch