Foreign investors withdrew a total of N45.85bn from the Nigerian stock market in January 2025, significantly surpassing the N25.66bn recorded as foreign inflows during the same period.
This trend underscores the persistent reluctance of foreign investors to commit fresh funds to Nigerian equities.
Key Highlights:
– Foreign Outflows: Foreign investors withdrew N45.85bn from the Nigerian stock market in January 2025.
– Foreign Inflows: Foreign inflows stood at N25.66bn during the same period.
– Total Foreign Transactions: Total foreign transactions increased by 7.13% to N71.51bn in January 2025.
– Domestic Transactions: Domestic transactions dominated the market, accounting for 88.22% of total transactions.
– Institutional Investors: Institutional investors reduced their participation, with transactions falling by 33.95% to N268.19bn.
Market Performance:The Nigerian stock market experienced a decline in total equity transactions, falling by 9.89% to N607.05bn in January 2025. This decrease was largely driven by investors liquidating their holdings.
Foreign Participation:Foreign participation in the market remained low, accounting for only 11.78% of total transactions. This represents a slight increase from 9.91% in December 2024 but remains far below historical averages.
Investor Sentiment:The decline in foreign participation and the significant outflow of funds suggest that investor sentiment remains subdued. However, retail investors showed increased enthusiasm, possibly seeking bargain opportunities in the market.
Exchange Rate:The naira appreciated from N1,535.81/$ in December 2024 to N1,478.22/$ in January 2025, showing signs of stability. However, this stability was not sufficient to reverse foreign investor sentiment.
Conclusion:The Nigerian stock market continues to face challenges in attracting foreign investment. To reverse this trend, there is a need for more stable macroeconomic policies, improved market transparency, and strengthened investor confidence.