The Nigerian equities market experienced a significant uptick in transaction value in July, driven primarily by increased activity among domestic investors. According to the July Domestic & Foreign Portfolio Investment report from the Nigerian Exchange Limited (NGX), the total transaction value surged by 38.7% month-on-month (m/m) to NGN491.61 billion, up from NGN354.55 billion recorded in June.
This substantial growth was largely fueled by a 59.4% m/m increase in domestic transactions, which reached NGN434.09 billion in July compared to NGN272.36 billion in June. The rise in domestic activity was bolstered by a sharp 138.5% m/m increase in transactions by institutional investors, along with a modest 2.4% m/m increase in retail investor participation. The heightened engagement from domestic players underscores their dominant role in the market, particularly as foreign investors continue to face challenges.
In contrast, foreign transactions declined significantly by 30.2% m/m, falling from NGN82.19 billion in June to NGN57.52 billion in July. This decline reflects the ongoing impact of foreign exchange (FX) liquidity constraints, which have deterred foreign portfolio investors (FPIs) from participating actively in the Nigerian equities market.
Looking ahead, analysts expect domestic investors to continue driving market performance in the short to medium term. However, buying activities may be tempered by elevated yields in the fixed-income market, which could divert investor interest away from equities. Meanwhile, FPIs are likely to remain on the sidelines due to the persistent FX liquidity challenges and the attraction of higher interest rates in advanced economies.
As the Nigerian market navigates these dynamics, the dominance of domestic investors is expected to sustain market momentum, even as the challenges of FX constraints and global economic conditions weigh on foreign participation.
