The Nigerian Exchange Limited (NGX) experienced a surge in trading activity throughout 2024, culminating in a total transaction value of N5.59 trillion, a testament to the increasing allure of the Nigerian capital market. This robust performance underscores a growing interest in equities and signifies increased participation from both domestic and foreign investors. The overwhelming majority of these transactions, a significant 85% or N4.73 trillion, originated from domestic investors, highlighting the continued dominance of local players within the Nigerian stock market. Foreign portfolio transactions accounted for the remaining 15%, or N852.03 billion, indicating sustained, albeit comparatively smaller, interest from international investors. This robust domestic participation reflects growing confidence in the Nigerian economy and the potential for returns within its equity market.
December 2024 proved to be a particularly active month for the NGX, with total transactions reaching N673.66 billion. This represents a substantial 52.29% increase compared to November’s N442.34 billion and a remarkable 95.88% surge compared to December 2023’s N343.92 billion. This impressive year-end performance further solidified the upward trajectory of the NGX and suggests continued momentum heading into the new year. The December figures mirrored the overall yearly trend, with domestic investors driving the bulk of the activity, contributing N606.91 billion or 90.09% of the total transactions. Foreign investors accounted for the remaining N66.75 billion, representing 9.91% of the month’s trading volume.
A deeper dive into the domestic market reveals a significant disparity between institutional and retail investors. In December 2024, institutional investors significantly outpaced their retail counterparts, transacting a total of N406.04 billion. This represents a striking 97.09% increase compared to November’s N206.02 billion. Retail investors also experienced growth, albeit at a more modest rate of 2.81%, with transactions rising from N195.38 billion in November to N200.87 billion in December. This dominance of institutional investors underscores their significant influence on the direction and volume of trade within the NGX.
Examining the full year’s data, the trend of institutional dominance persists. Throughout 2024, institutional investors consistently accounted for the lion’s share of domestic transactions, highlighting their pivotal role in shaping market dynamics. This trend reflects the significant capital resources and market expertise that institutional investors bring to bear, allowing them to execute larger trades and exert greater influence on price movements. The data paints a clear picture of a market heavily influenced by institutional activity, with retail investors playing a secondary, albeit still important, role.
A long-term perspective reveals a consistent growth trajectory for domestic transactions on the NGX. Over the past eighteen years, from 2007 to 2024, domestic transactions have surged by 33.15%, rising from N3.56 trillion to N4.73 trillion. This sustained growth underscores the increasing depth and maturity of the Nigerian capital market, attracting greater participation from local investors. While foreign transactions have also witnessed growth, increasing by 38.31% from N616 billion to N852 billion over the same period, they remain a smaller component of the overall market activity. This suggests continued potential for increased foreign investment in the Nigerian capital market.
The strong performance of the NGX in 2024, driven primarily by robust domestic participation, signals a positive outlook for the Nigerian economy. The substantial increase in trading activity, coupled with the growing influence of institutional investors, points to a maturing market with increasing liquidity and investment opportunities. The sustained growth in domestic transactions over the long term reinforces the narrative of a growing confidence in the Nigerian economy. While foreign participation remains comparatively lower, its steady growth suggests continued potential for further international investment. The overall positive trajectory of the NGX underscores its vital role in driving economic growth and development within Nigeria.
