The Nigerian Exchange Limited (NGX) witnessed robust trading activity in the first five months of 2025, with domestic investors playing a dominant role. Transactions totaling N3.41 trillion were recorded during this period, showcasing a vibrant and active market. Domestic investors contributed the lion’s share, accounting for N2.42 trillion or 70.83% of the total equity trades. This significant domestic participation underscores the growing confidence of local investors in the Nigerian capital market. Conversely, foreign portfolio investments amounted to N996.03 billion, representing 29.17% of the total transactions. This disparity highlights the continued preference of domestic investors for the Nigerian market, even amidst global economic fluctuations. The robust domestic participation is a positive indicator of the market’s resilience and potential for growth.
May 2025 proved to be a particularly active month, registering a substantial increase in trading activity. Total equity transactions surged by 45.32% to N700.50 billion, compared to N482.04 billion in April. This surge was primarily fueled by increased participation from domestic investors, who contributed N581.59 billion in May, a significant 38.81% increase from the previous month. Foreign transactions also witnessed a remarkable resurgence, jumping by 88.54% to N118.91 billion in May, up from N63.07 billion in April. This renewed interest from foreign investors signals a potential shift in sentiment towards the Nigerian market, possibly influenced by improving macroeconomic conditions and recent foreign exchange market reforms.
A deeper dive into the domestic investor segment reveals a notable trend: retail investors outperformed institutional investors by a considerable margin of 16%. Retail transactions exhibited a particularly sharp increase, soaring by 86.12% from N181.31 billion in April to N337.46 billion in May. This surge in retail activity suggests increasing accessibility and participation by individual investors in the stock market. While institutional investors also recorded growth, their increase was more modest at 2.72%, reaching N244.13 billion in May from N237.66bn in April. This difference in growth rates highlights the increasing influence of retail investors in shaping market dynamics.
Comparing the May 2025 performance to the same period in 2024 reveals a dramatic surge in investor confidence. Total equity transactions in May 2025 were 97.11% higher than the N355.38 billion recorded in May 2024. This substantial year-on-year growth further reinforces the positive trajectory of the Nigerian capital market. Furthermore, the year-to-date figures for 2025 showcase an impressive 51% increase compared to the N2.25 trillion reported in the first five months of 2024, indicating sustained momentum and investor optimism. This consistent growth paints a promising picture for the future of the NGX.
Looking back over a longer horizon, the Nigerian capital market has shown significant growth in both domestic and foreign participation. From 2007 to 2024, domestic participation increased by 33.15%, rising from N3.56 trillion to N4.74 trillion. Similarly, foreign transactions grew by 38.31% during the same period, climbing from N616 billion to N852 billion. This sustained growth over nearly two decades demonstrates the increasing attractiveness of the Nigerian market to both local and international investors. The long-term growth trend underscores the market’s fundamental strength and its potential for continued expansion.
Several factors have contributed to the positive developments in the Nigerian capital market. The NGX attributes the growth in domestic trading to a combination of increased investor education initiatives, improved digital access to the market, and renewed confidence stemming from monetary policy adjustments and currency market reforms implemented by the Central Bank of Nigeria. These initiatives have collectively fostered a more favorable environment for investment, attracting both seasoned and new investors. While the significant drop in foreign transactions in April 2025, from N699.89 billion in March to N63.07 billion, raises some concerns, the subsequent rebound in May suggests a potential for continued growth and recovery in foreign investment. This overall positive trend underscores the resilience and potential of the Nigerian capital market.
