MARKET NEWS
Foreign investors drive stock market to record N2.23tr turnover in three months - THE NATION
by Taofik Salako, Deputy Business Editor
- Foreign portfolios rise by 281.9%
- FPIs now account for one-third of market
Total transactions at the Nigerian stock market rose to N2.23 trillion in the first three months of this year, its highest quarterly turnover.
Official trading report at the Nigerian Exchange (NGX) reviewed yesterday showed that total transactions at the stock market rose to N2.23 trillion in the first three months of this year, an increase 44 per cent on N1.55 trillion recorded in comparable period of 2024.
The first quarter 2025 performance represented a new record for the market, driven by steady domestic transactions and upsurge in foreign transactions.
Foreign portfolio investments (FPIs) now accounts for more than one-third of transactions at the Nigerian market, as against the situation in the previous year when foreign transactions amounted to about one-seventh of the market’s turnover.
The latest report showed that total foreign portfolio transactions rose by 281.9 per cent from N213.18 billion in first quarter 2024 to N814.05 billion in first quarter 2025. The proportion of participation by FPIs increased from 13.77 per cent in first quarter 2024 to 36.47 per cent in first quarter 2025, the highest so far.
Domestic investors have also shown sustained strong appetite for quoted equities with a turnover of N1.42 trillion in first quarter 2025 as against N1.33 trillion in first quarter 2024, representing a modest increase of 6.2 per cent. The proportion of domestic investors’ transactions however dropped from 86.23 per cent of total market turnover in first quarter 2024 to 63.53 per cent in first quarter 2025.
The report indicated upbeat across the buy and sell sides of foreign transactions. Foreign inflows jumped by 321.6 per cent from N93.37 billion in first quarter 2024 to N393.68 billion in first quarter 2025. Outflows, on the other hand, increased by 250.9 per cent from N119.81 billion in first quarter 2024 to N420.37 billion in first quarter 2025.
Experts attributed the upbeat at the stock market to the increasing attractiveness of the Nigerian market to foreign investors, ongoing economic reforms, resilient earnings by Nigerian companies, exchange rate differential, ongoing banking recapitalisation and the reform in the oil sector.
FPI transactions at the NGX had more than doubled from N410.62 billion in 2023 to N852.03 billion in 2024. The increase in foreign transactions supported resilient domestic demand to push NGX to its highest-ever turnover of N5.587 trillion in 2024. It had recorded N3.578 trillion in 2023.
Managing Director, AIICO Capital, Dr Femi Ademola, said Nigerian equities have become very attractive to both foreign and domestic investors.
“The equities market has become very attractive, mostly due to the devaluation of the currency which make the shares very cheap, especially to foreign investors. The very strong half-year performance reported by corporates especially banks and the corporate actions that followed the announcements have also driven many investors to the equities market. Finally, the lack of volatilities in the bond market makes it unattractive to investors, thus they flock to the equities market,” Ademola, a Chartered Financial Analyst (CFA), said.
Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe, said the ongoing banking recapitalisation and the reforms in the oil sector have driven more investors to the market.
“We’ve seen increasing return of foreign portfolio investors, I understand the turnover by FPIs has grown significantly in the last few months. This can be attributed to the weaker naira that makes Nigerian stocks a bargain for FPIs. Secondly, new listings such as Aradel also boosted investors’ appetite for stocks. This can also be seen in the light of the approval of the Exxon Mobil’s acquisition by Seplat by the Federal Government. Thirdly, the banking recapitalisation exercise along with impressive second quarter reports have continued to attract investments towards that sector,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.
Managing Director, HighCap Securities, Mr David Adonri, said the banking sector has contributed substantially to the growing turnover at the stock market.
“The recapitalisation of banks is orchestrating demand for their shares even in the secondary market. Highly capitalised stocks in the petroleum sector have also been upbeat. Finally, investors have also reacted positively to the big interim dividends declared by banks,” Adonri said.
