Foreign Portfolio Inflows Into NGX Rise 144% To ₦55.93bn H1

Foreign portfolio inflows into Nigeria’s stock market surged to ₦55.93bn in the first half of 2025, representing a 144.14 per cent increase from the ₦22.91bn recorded in the same period of 2024, according to the Nigerian Exchange (NGX) Foreign Portfolio Investment (FPI) report obtained by THE WHISTLER.

The sharp rise signals renewed interest from offshore investors despite ongoing macroeconomic volatility.

Analysts attributed the upswing partly to attractive valuations in blue-chip stocks and improved liquidity in the equities market.

However, the positive momentum was tempered by a corresponding spike in capital flight. Foreign portfolio outflows between January and June 2025 climbed to ₦57.61bn, an 84.99 per cent increase from the ₦31.14bn recorded a year earlier.

Outflows exceeded inflows by about ₦1.68bn, underscoring lingering uncertainty over Nigeria’s investment climate.

Market experts say the imbalance reflects persistent challenges, including unstable exchange rates, high inflation, and policy unpredictability, which have driven some foreign investors to scale back their exposure.

As of June 30, 2025, total transactions on the NGX rose 11.15 per cent to ₦778.65bn (about $509.02m) from ₦700.50bn ($441.64m) in May 2025.

Compared to the ₦354.55bn recorded in June 2024, the figure represented a 119.62 per cent year-on-year increase.

Domestic investors continued to dominate market activity, accounting for roughly 64 per cent of total transactions in June 2025.

Total domestic transactions rose 9.93 per cent month-on-month to ₦639.34bn, while total foreign transactions grew faster at 17.16 per cent, from ₦118.91bn ($74.97m) in May to ₦139.31bn ($91.07m) in June.

Institutional investors maintained an edge over retail participants, outperforming by 14 per cent.

Also, retail transactions dropped 18.62 per cent to ₦274.63bn in June from ₦337.46bn in May, while institutional activity surged 49.39 per cent to ₦364.71bn from ₦244.13bn over the same period.

Historical data covering 18 years shows domestic transactions increased 33.15 per cent from ₦3.556tn in 2007 to ₦4.735tn in 2024.

Foreign transactions also grew, rising 38.31 per cent from ₦616bn to ₦852bn in the same period.

In 2024, domestic investors accounted for about 85 per cent of total market transactions, with foreign investors contributing roughly 15 per cent.

For 2025 so far, total domestic transactions stand at about ₦3.058tn, while foreign transactions are approximately ₦1.135tn.

Market watchers said the persistence of high foreign outflows relative to inflows in 2025 underscores the importance of sustained policy stability, currency market reforms, and inflation control in restoring foreign investor confidence.

The Managing Director and Chief Executive Officer of APT Securities and Funds Limited, Kasimu Garba Kurfi, said the stability in Nigeria’s foreign exchange market and the elimination of foreign exchange (FX) losses have been the primary drivers of recent strong performance in the Nigerian capital market.

Speaking on the factors behind the surge in trading activity on the Nigerian Exchange (NGX), Kurfi noted that the relative stability of the naira has significantly reduced speculative demand for the U.S. dollar, prompting investors to redirect funds into equities.

“Before now, many investors were buying dollars purely for speculation. That avenue has dried up, and those funds are now flowing into the equity market.

“Our market turnover has jumped from an average of ₦5bn per day last year to between ₦25bn and ₦30bn per day in 2025.

“The question is: where is this money coming from? It’s coming from speculators leaving the foreign exchange market for equities, because this is where the returns are now,” he said.

Kurfi explained that market participants — particularly those seeking quick gains — will always follow opportunities. “Before, it was the dollar. Now, it is equities,” he added.

Another major catalyst, according to the APT boss, is the absence of crippling FX losses that had plagued many manufacturing companies in recent years.

He recalled that in 2024, companies reported massive losses arising from currency depreciation.

“Last year, some companies recorded over ₦340bn in FX losses, while others posted more than ₦500bn in tax-related losses. Combined, we were looking at around ₦800bn in losses for the manufacturing sector.

“From January to date, FX losses have dropped to zero. No company is bringing in financial results showing FX losses. That change alone is enough to transform losses into profits for many firms,” Kurfi said.

Analysts agree that the combination of currency stability, improved corporate earnings outlook, and strong domestic investor participation has fueled higher volumes on the NGX.

With daily turnover now at historic highs, the market appears to be benefiting from a reallocation of capital away from the currency market toward equities.

Foreign Portfolio Inflows Into NGX Rise 144% To ₦55.93bn H1 is first published on The Whistler Newspaper