Foreign flight from NGX in April sparks N633bn market decline

BY MOTOLANI OSENI

Foreign and domestic portfolio investment in Nigeria’s equities market experienced a decline of N633.47 billion in April 2025 as domestic investors showed resilience amid a shift in foreign investment.

The total portfolio investment dropped by N633.47 billion, reflecting a significant shift from March’s heightened activity, primarily due to the absence of block trades, which had previously bolstered market performance.

According to the Domestic & Foreign Portfolio Participation in Equity Trading report as of April 30, 2025, total transactions at the Nigerian Stock Exchange decreased by 56.79 per cent, from N1.116 trillion in March 2025 to N482.04 billion in April 2025. This downturn comes amid ongoing global uncertainties that have affected investor sentiment.

Despite the overall decline, domestic investors demonstrated notable strength. In April, the total value of transactions executed by Domestic Investors surpassed those by Foreign Investors by approximately 74 per cent. Specifically, domestic transactions increased slightly by 0.81 per cent, rising from N415.62 billion in March to N418.97 billion in April. In contrast, foreign transactions decreased significantly by 90.99 per cent, from N699.89 billion to N63.07 billion during the same timeframe.

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This trend is attributed to a lack of block trades, which had supported foreign transaction volumes in March. Furthermore, among domestic investors, institutional investors outperformed retail investors by 14 per cent.

Retail transactions saw an 8.02 per cent decline from N197.12 billion in March to N181.31 billion in April, while institutional transactions grew by 8.77 per cent, from N218.50 billion to N237.66 billion.

April also marked a period of heightened global market volatility following U.S. President Donald Trump’s announcement of new tariffs, including a 14 per cent levy on Nigerian exports. Analysts emphasise the importance of ongoing macroeconomic reforms in Nigeria to attract sustainable foreign interest. They highlight that, in the current environment, domestic institutions are the key drivers of the equities market.

Cowry Research analysts noted the increasing self-reliance of the Nigerian equities market, with local investors continuing to play a pivotal role in market activity, even as foreign participation wanes. The consistent engagement of domestic investors demonstrates robust confidence in the local market, which is crucial for stability despite external uncertainties.

A senior stockbroker, Mr Tunde Oyediran, remarked on the implications of global economic factors, suggesting that while shifts such as U.S. tariffs have impacted foreign investment outlooks, there remains an opportunity for the Nigerian market to foster growth through enhanced local participation.

“Overall, while April’s figures reflect challenges in foreign investment, the resilience of domestic investors positions Nigeria’s equities market for continued activity and potential growth amidst ongoing developments,” he stated.