The Nigerian Exchange Limited (NGX) has announced that total domestic and foreign portfolio transactions in Nigeria’s equity market amounted to N346.23 billion in April 2024. This was revealed in a statement from the NGX, shared with Nairametrics.
As of April 30, 2024, the total transactions at the nation’s bourse saw a significant decline of 35.71%, down from N538.54 billion (approximately $404.69 million) in March 2024 to N346.23 billion (about $260.24 million) in April 2024. The drop is largely attributed to low investor sentiment, with many exhibiting caution amid ongoing market volatility in Nigeria.
The NGX All-Share Index also experienced a substantial decline in April, losing N3.57 trillion in market value following policy announcements from the Central Bank of Nigeria (CBN) that favored fixed-income securities.
A deeper analysis of the transactions between March and April 2024 shows that total domestic transactions decreased by 49.27%, from N444.28 billion in March to N225.40 billion in April. In contrast, total foreign transactions increased by 28.19%, from N94.26 billion (about $70.83 million) to N120.83 billion (about $90.83 million) during the same period.
The NGX highlighted that institutional investors outperformed retail investors by 10%. Retail transactions fell by 54.89%, from N223.37 billion in March to N100.77 billion in April 2024. Similarly, the institutional segment of the domestic market decreased by 43.58%, from N220.91 billion in March to N124.63 billion in April 2024.
Over a 16-year period, domestic transactions declined by 10.94%, from N3.556 trillion in 2007 to N3.167 trillion in 2023, while foreign transactions dropped by 33.28%, from N616 billion to N411 billion over the same period. In 2023, domestic transactions comprised about 89% of the total, with foreign transactions making up only 11%.
In April, the NGX All-Share Index’s significant drop in market value, losing N3.57 trillion, was influenced by several CBN policy announcements. Notably, these included a new recapitalization plan for commercial banks to raise N4 trillion in fresh capital over the next two years and the Monetary Policy Committee’s decision to increase the benchmark interest rate by 200 basis points, from 22.75% to 24.75%. This substantial rate hike led to intensified sell-offs, resulting in a 6% decline in the local bourse and the benchmark index closing at 98,225.63 points, falling below the 100,000-point threshold, a stark contrast to its peak of 104,562.06 points at the end of March 2024.
