By the end of May, the total amount of transactions on the local exchange had reached N2.35 trillion, a rise of 115.40 percent over the first five months of 2023. This was revealed in the Nigerian Exchange Limited’s report on domestic and international portfolio involvement in stock trading, which was made public on Thursday.
The research claims that local investors continued to dominate the market, transacting around N1.79tn (79.63%) during the five months as opposed to N458.29bn (20.37%) for international investors. An further analysis revealed that domestic institutional investors held a N906 billion advantage over domestic retail investors, with N885.19 billion.
Between May 2023 and this year, Nigeria has witnessed a change in leadership which led to critical reforms being made, including foreign exchange market harmonisation and fuel subsidy removal, two policies that experts have said would boost the capital market and encourage foreign investors to return.
Within this period, the Monetary Policy Rate has been hiked multiple times to 26.25 per cent at the May 2024 MPC meeting.
PwC, in its Nigeria economic outlook, titled, ‘Navigating economic reforms,’ said, “The Nigerian Stock Exchange recorded an increase of 85.2 per cent in market capitalisation from N30.3tn in May 2023 to N56.5tn in
May 2024. The increase was driven partly by the positive sectoral index performance of the oil and gas (124 per cent), consumer goods (104 per cent), insurance (88 per cent), and banking (69 per cent) sectors.
“The Nigeria 10-Year Government Bond Yield reached an all-time high
of 19.30 per cent in May 2024 from 14.55 per cent in May 2023. The increase in bond yields is due to attractive rates on OMO and treasury bills, spurred by the rise in the MPR.”
Month on month, NGX reported that total transactions rose from N346.23bn in April to N355.38bn in May, reflecting an increase of 2.64 per cent.
Domestic investors played a pivotal role in driving the increased activity on the local bourse as their participation increased by 2.53 per cent from N225.40bn in April 2024 to N231.10bn in May 2024.
Between April and May, institutional Investors outperformed retail Investors by two per cent at N117.57bn to N113.53bn. Meanwhile, total foreign transactions increased by 2.86 per cent from N120.83bn to N124.28bn between April and May 2024.
