Foreign inflows into the Nigerian Exchange Limited (NGX) experienced a notable decline in September 2024, dropping to N11.26 billion, the lowest of the year. This follows a steady decrease from May’s high of N54.87 billion. By the end of the third quarter, total foreign inflows into the NGX reached N310.99 billion, a significant increase compared to N108.93 billion during the same period in 2023. However, foreign outflows worsened in September, rising to N30.15 billion from N24.38 billion in August.
Experts attribute the drop in foreign investment to the country’s unstable currency and high interest rate environment. The Central Bank of Nigeria’s tight monetary policy, aimed at curbing inflation, has kept interest rates high at 27.25%. Meanwhile, inflation stood at 33.88% in October, prompting investors to move their capital out of the equity market and into more lucrative alternatives. Despite these challenges, local transactions on the NGX saw a significant rise.
In contrast to foreign investment trends, domestic transactions saw a sharp increase. Domestic investors outperformed foreign investors by a large margin, accounting for about 84% of the total transactions on the NGX in September. Domestic transactions rose by 40.23% from August to September 2024, driven by a 59.42% increase in retail investor activity. As the market continues to adapt to the economic climate, the balance between domestic and foreign participation remains a key focus for the exchange.
