Foreign participation in the Nigerian Exchange (NGX) reached its peak in November 2023, accounting for N71.37 billion ($75.76 million), representing 23.74 per cent of the market’s total monthly transactions. This surge in foreign portfolio participation marks the highest recorded in 2023, according to data released by the NGX and tracked by NATIONAL ECONOMY.
In November, the total transactions in the NGX amounted to about N300.67 billion, with domestic participation contributing N229.30 billion. The detailed breakdown reveals that foreign inflow in November 2023 was N34.77 billion ($36.91 million), while foreign outflow during the same period was N36.60 billion ($38.85 million).
Comparatively, domestic inflow totaled N113.53 billion, and domestic outflow stood at N113.77 billion. Domestic institutional investors contributed about N136.52 billion, while domestic retail investors accounted for N92.78 billion.
The month-on-month analysis shows a 34.08 per cent increase in total transactions in November 2023 compared to October 2023. Foreign transactions experienced substantial growth, rising by 113.94 per cent to N71.37 billion, up from N33.36 billion in October 2023, where foreign transactions represented 15.1 per cent of the total.
As of November 2023, the total transactions recorded in the NGX reached N3.234 trillion, indicating a 39.16 per cent increase over the total transactions recorded throughout 2022.
The decline in foreign transactions in the NGX started in 2019, reaching a low of N379 billion in 2022. The resurgence in foreign participation is closely monitored for potential impacts on the exchange rate, with experts emphasizing its role in influencing the supply of foreign exchange in the country. Despite the gradual return of foreign investors, the exchange rate dynamics are yet to show noticeable changes.
Experts suggest that the revival of foreign portfolios in Nigeria’s capital market may have positive implications, although its immediate impact on the exchange rate remains to be seen.
