In September 2024, the amount of money coming into the Nigerian Exchange Limited from foreign investors dropped to its lowest level of the year, totaling just 11.26 billion naira (about $14.6 million). This information comes from the latest report on domestic and foreign investments in Nigeria’s stock market.
The report shows that as foreign investment decreased, foreign investors were also selling off more of their existing investments between August and September. In the first nine months of 2024, total foreign investment in Nigeria reached 310.99 billion naira, which is a significant increase compared to 108.93 billion naira during the same period in 2023. The peak for foreign inflow this year occurred in May 2024, when it reached 54.87 billion naira, but it has been declining steadily since then, dropping to 11.26 billion naira by September.
On the other hand, the amount of money leaving Nigeria (foreign outflow) increased to 30.15 billion naira in September, up from 24.38 billion naira in August. Experts believe that the unstable value of the naira (the Nigerian currency) and high interest rates are causing investors to pull out of the stock market and look for better investment opportunities elsewhere.
As of last Friday, the naira was trading at 1,652.25 naira to one US dollar. The Central Bank of Nigeria (CBN) recently set the benchmark interest rate at 27.25 percent in an effort to control inflation, which reached 33.88 percent in October. There are expectations that the CBN may raise interest rates again at their next meeting, although not by a large amount.
Despite these challenges, the report indicates that the total value of transactions on the Nigerian Exchange increased significantly by 29.90 percent from August to September 2024, rising from 379.52 billion naira (about $237.70 million) to 493.01 billion naira (about $307.84 million). When compared to September 2023, this represents a 66.67 percent increase in total transactions.
Interestingly, domestic investors were much more active in the market than foreign investors, accounting for about 84 percent of all transactions in September 2024. The report also highlighted that domestic transactions rose by 40.23 percent from August to September, increasing from 322.05 billion naira to 451.60 billion naira. Meanwhile, foreign transactions decreased by 27.95 percent, dropping from 57.47 billion naira (about $35.99 million) to 41.41 billion naira (about $25.86 million) during the same period.
In September, retail investors (individual investors) outperformed institutional investors (large organizations) by 28 percent. Specifically, retail transactions rose by 59.42 percent from August, moving from 180.72 billion naira to 288.10 billion naira in September 2024.
