Foreign Investment Inflow to Capital Market Drops to N16 Billion

H1 2023: APT, Cardinal Stone, 8 Others Record N829.96bn Transactions On NGX

In January, foreign investment in the Nigerian Exchange experienced a decline of approximately 9.73%, amounting to N15.78 billion compared to N17.48 billion recorded in December 2023.

As per the latest Domestic and Foreign Portfolio Investment Report from the NGX, this represented a year-on-year increase of 60.37%.

The report highlighted that while total foreign transactions on the local bourse increased by 10.95% from N47.87 billion (approximately $53.26 million) to N53.11 billion (approximately $39.13 million) between December 2023 and January 2024, the rise was primarily driven by outflows, which escalated to N37.33 billion from N30.39 billion in the previous month.

The decline in foreign capital inflow reflects concerns among investors about the potential challenges associated with accessing their funds due to ongoing dollar scarcity in the country.

Market stakeholders had anticipated a surge in foreign investments as investors responded to the impacts of recent policy changes, including the removal of fuel subsidies and the streamlining of the foreign exchange market segments.

Overall, trading data from market operators indicated a significant increase in total transactions at the nation’s bourse, surging by 89.45% from N343.90 billion (approximately $382.59 million) in December 2023 to N651.52 billion (approximately $479.99 million) in January 2024.

Comparing January 2024 with the same period in 2023, the report revealed a notable surge of 233.94% in total transactions. Additionally, domestic investors outperformed foreign investors by approximately 84% in January 2024.

Further analysis showed that total domestic transactions surged by 102.15% from N296.03 billion to N598.41 billion between January and December 2023.

Regarding the breakdown of domestic transactions, retail transactions soared by 211.73%, rising from N91.61 billion in December to N285.58 billion in January 2024. Similarly, institutional transactions increased by 53.03% from N204.42 billion in December 2023 to N312.83 billion.

In 2023, total domestic transactions accounted for about 89% of the total transactions, while foreign transactions made up approximately 11%. This year, total domestic transactions amounted to approximately N598.41 billion, with total foreign transactions valued at N53.11 billion.

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