 dropped sharply by 91% to N63 billion in April 2025,){kind=link}
Foreign portfolio investments on the Nigerian Exchange Limited (NGX) experienced a dramatic decline of 90.99% in April 2025, falling sharply to N63.07 billion from N699.89 billion recorded in March, according to the latest Domestic and Foreign Portfolio Investment report released by NGX. This significant drop highlights a sudden pullback in foreign investor activity after a robust March driven by large block trades.
The steep fall in foreign transactions came as March benefitted from high-value deals that temporarily boosted foreign inflows into the market. Without similar large trades in April, foreign investor participation drastically reduced, accounting for just 13.08% of the total market turnover during the month. Overall, total trading volumes on NGX shrank by 56.79%, falling from N1.115 trillion in March to N482.04 billion in April.
In dollar terms, the value of transactions on the exchange declined from approximately $725.86 million in March to about $301.90 million in April, based on official exchange rates from the Central Bank of Nigeria (CBN). This sharp reduction in foreign investment is likely influenced by global economic uncertainties and regulatory dynamics impacting investor confidence.
Despite the slump in foreign portfolio transactions, domestic investors sustained the market’s activity, with domestic transactions rising marginally by 0.81%, from N415.62 billion in March to N418.97 billion in April. Domestic investors contributed a dominant 86.92% share of total transactions in April, underscoring their critical role in market stability amid foreign withdrawal.
A deeper analysis reveals that institutional investors led domestic participation, with their trades increasing by 8.77% from N218.50 billion in March to N237.66 billion in April. Conversely, retail investors scaled back activity by 8.02%, with their transaction values decreasing from N197.12 billion to N181.31 billion over the same period. This divergence suggests institutional confidence remains steadier compared to individual investors in the short term.
Looking at broader trends, cumulative domestic and foreign portfolio transactions from January to April 2025 totalled N2.714 trillion. Domestic investors accounted for N1.837 trillion (67.68%), while foreign investors contributed N877.12 billion (32.32%). Compared with the same period in 2024, when total transactions amounted to N1.894 trillion—split between N1.560 trillion domestic and N334.01 billion foreign—this reflects a significant year-on-year increase in foreign participation, despite the recent April setback.
Over the longer term, data from NGX shows steady growth in both domestic and foreign transactions. Domestic trading surged 33.15% from N3.556 trillion in 2007 to N4.735 trillion in 2024, while foreign transactions grew 38.31% over the same period, rising from N616 billion to N852 billion. These trends indicate sustained interest and gradual development of Nigeria’s capital markets.
However, the volatility seen in recent months, including a 16.07% decline in total transactions to N509.47 billion in February 2025, points to ongoing market sensitivity to global financial dynamics and local economic policies.
Experts suggest that the decline in foreign transactions could stem from factors such as global interest rate hikes, currency fluctuations, geopolitical risks, and domestic regulatory shifts affecting capital flows. To boost foreign investment confidence, market regulators may need to enhance transparency, improve investor protections, and provide clearer guidance on foreign exchange policies.
Meanwhile, the resilience of domestic investors, particularly institutional players, underscores their growing importance in driving Nigeria’s stock market performance. Strengthening domestic capital mobilization could help cushion the market against external shocks.
In conclusion, the Nigerian Exchange faces a critical period where restoring foreign investor confidence and expanding domestic participation will be vital to sustaining market growth and supporting Nigeria’s broader economic development goals.