The NGX recorded N4.19tn in equity turnover in H1 2025, up from N2.60tn in 2024, driven by institutional domestic investors and rising foreign participation, reflecting strong market momentum and investor confidence amid ongoing economic reforms, TEMITOPE AINA writes

The Nigerian Exchange Limited has announced that total equity transactions in the first half of 2025 surged to N4.19tn, reflecting a significant 61 per cent increase when compared to the N2.60tn recorded in the same period of 2024.

This growth in market activity was driven by heightened investor interest from both domestic and foreign participants, with domestic investors continuing to dominate the local bourse.

According to NGX’s “Domestic and Foreign Portfolio Participation in Equity Trading” report for the period ended June 30, 2025, domestic transactions accounted for 72.92 per cent of total trades at N3.06tn, while foreign transactions made up 27.08 per cent, translating to N1.14tn.

Breakdown of monthly activity

Equity market activity kicked off the year on a strong note, with total transactions valued at N607.05bn. Domestic investors accounted for the bulk of this value at N535.54bn, or 88.22 per cent, while foreign participation stood at N71.51bn, representing 11.78 per cent of total trades. Foreign inflows in January were N25.66bn, while outflows were N45.85bn, indicating more capital exited the market than entered during the month.

Market momentum slowed slightly in February, with total transactions dropping to N509.47bn, a 16 per cent decline from January. Domestic transactions remained dominant at N466.82bn, or 91.63 per cent, while foreign trades further declined to N42.65bn (8.37 per cent). Foreign inflows were N18.05bn, and outflows stood at N24.60bn, continuing the outflow trend from January.

March witnessed a significant spike in trading activity, with total transactions reaching N1.12tn, the highest monthly figure recorded in H1. Notably, foreign investors overtook domestic investors, contributing N699.89bn, which accounted for 62.74 per cent of the month’s trades. Domestic trades stood at N415.62bn, or 37.26 per cent. Foreign inflows and outflows were almost evenly matched at N349.97bn and N349.92bn, respectively. This surge could be attributed to renewed interest from offshore investors driven by favourable exchange rate expectations and renewed macroeconomic optimism.

Total market turnover fell sharply in April to N482.04bn, reflecting a market pullback after March’s extraordinary spike. Domestic trades rose slightly to N418.97bn, accounting for 86.92 per cent, while foreign trades plunged to N63.07bn (13.08 per cent). Foreign inflows were N26.64bn, with outflows at N36.43bn, indicating continued repatriation of funds despite a more cautious investment climate.

Market activity rebounded in May, with the total transaction value climbing to N700.50bn, representing a 45.3 per cent increase from April. Domestic transactions stood at N581.59bn, or 83.02 per cent, while foreign transactions rose to N118.91bn, or 16.98 per cent. Foreign inflows were recorded at N66.11bn, while outflows amounted to N52.80bn, marking the first time in the year that inflows outpaced outflows.

In June, total equity trades climbed further to N778.65bn, reflecting an 11.15 per cent month-on-month increase from May. Domestic transactions grew to N639.34bn, a 9.93 per cent increase, while foreign transactions expanded by 17.16 per cent to N139.31bn, the second-highest monthly foreign participation this year. However, in contrast to May, outflows once again exceeded inflows: N72.82bn in inflows versus N66.49bn in outflows. Retail participation fell by 18.62 per cent, from N337.46bn to N274.63bn, while institutional investors boosted their activity by 49.39 per cent, growing from N244.13bn in May to N364.71bn in June.

Foreign portfolio investment flow

Foreign portfolio investors, non-Nigerian individuals or institutions that invest in stocks and shares, contributed significantly to market activity in H1. Of the N1.14tn in foreign trades recorded, inflows accounted for N559.25bn, while outflows stood at N576.09bn. This implies that more capital left the Nigerian market than came in, although the difference was marginal.

Compared to H1 2024, foreign transactions rose sharply by 110 per cent, up from N540.48bn. The spike reflects increased foreign confidence in the local capital market, possibly aided by exchange rate reforms and more transparent monetary policies.

In June 2025 alone, foreign transactions increased 17.16 per cent, from N118.91bn in May to N139.31bn. This value, when converted at the prevailing NAFEM exchange rate of N1,529.71/$, amounts to approximately $91.07m.

Domestic participation remains dominant

Domestic investors continued to dominate trading on the NGX in the first half of the year. Within the domestic segment, activities were further broken down into retail and institutional investors.

Retail investors refer to individual investors who buy and sell stocks for personal accounts.

Institutional investors include pension funds, asset managers, insurance companies, and mutual funds that trade in large volumes.

In June 2025, institutional investors outperformed retail investors by 14 per cent. Retail transactions fell by 18.62 per cent, from N337.46bn in May to N274.63bn in June, while institutional trades rose 49.39 per cent, from N244.13bn to N364.71bn.

This pattern suggests that large institutions are regaining confidence in the market amid broader macroeconomic reforms, while retail participation may have been affected by market volatility and cost-of-living pressures.

18-year historical context

Putting the current data in historical perspective, the NGX report revealed that over the last 18 years, domestic transactions have grown by 33.15 per cent, from N3.56tn in 2007 to N4.73tn in 2024. Similarly, foreign transactions rose by 38.31 per cent, from N616bn in 2007 to N852bn in 2024.

The sustained dominance of domestic investors was also reaffirmed, with 85 per cent of total transactions in 2024 attributed to local participation and just 15 per cent to foreign investors.

For H1 2025, domestic investors have already contributed N3.06tn, reinforcing their strong influence on market stability and liquidity.

Conclusion

The N4.19tn equity turnover recorded in the first half of 2025 represents a notable improvement in investor confidence, with institutional investors taking a more active role and foreign participation showing signs of a rebound.

However, the trend of higher outflows than inflows from FPIs indicates that while interest is returning, Nigeria still faces capital repatriation concerns, likely influenced by currency volatility and external market conditions.

As reforms deepen and macroeconomic fundamentals improve, stakeholders expect an even more robust performance in the second half of the year.