…Foreign Portfolio Pullback Drives Sharp Decline In Market Turnover
The Nigerian stock market experienced a dramatic contraction in total transaction value in April 2025, falling by 56.79 per cent to ₦482.04bn (approximately $301.90m) from ₦1.115tn (about $725.86m) recorded in March.
This steep decline, captured in the latest Domestic and Foreign Portfolio Investment Report published by NGX, was largely driven by a sharp retreat in foreign portfolio investment, highlighting growing concerns over investor sentiment and capital flow volatility.
Despite the month-on-month decline, total transactions in April 2025 remained 39.22 per cent higher than April 2024’s figure of ₦346.23bn.
However, the significant reduction from March’s performance was primarily attributed to the absence of large-scale block trades that had substantially boosted foreign participation during the previous month.
Foreign transactions fell drastically by 90.99 per cent in April 2025, plummeting from ₦699.89bn (about $455.41m) in March to just ₦63.07bn (about $39.50m).
The dramatic pullback in foreign portfolio investment reduced the share of foreign participation to just 13 per cent of total market transactions for the month, with domestic investors accounting for approximately 87 per cent.
Conversely, domestic market activity remained relatively stable, with total domestic transactions increasing marginally by 0.81 per cent from ₦415.62bn in March to ₦418.97bn in April.
Institutional investors led the charge domestically, increasing their share of market activity by 8.77 per cent to ₦237.66bn, up from ₦218.50bn in the prior month.
Meanwhile, retail investor activity declined by 8.02 per cent to ₦181.31bn, down from ₦197.12bn in March.
The comparative strength of institutional participation softened the overall impact of the foreign retreat.
Institutional investors outperformed retail investors by 14 per cent in April, reinforcing the dominance of large-scale domestic investors in a market increasingly characterized by local capital resilience.
Despite the monthly decline, long-term trends showed a consistent uptick in domestic market participation.
Over the last 18 years, domestic transactions have risen by 33.15 per cent from ₦3.556tn in 2007 to ₦4.735tn in 2024.
In contrast, foreign transactions have grown by 38.31 per cent over the same period, rising from ₦616bn to ₦852bn.
However, 2024 data showed that domestic investors accounted for 85 per cent of all market activity, with foreign transactions comprising just 15 per cent, indicating a growing reliance on local capital.
As of 2025 year-to-date, total domestic transactions have reached approximately ₦1.837tn, while foreign transactions stood at around ₦877.12bn.
Analysts warned that the recent foreign capital retreat underscores the Nigerian capital market’s exposure to global risk sentiment, especially in the absence of structural reforms that would improve investor confidence and ease capital repatriation challenges.
While domestic institutional investors continue to support market stability, the decline in foreign interest could pose liquidity risks and affect pricing dynamics if the trend persists.
Capital market regulators may need to double down on initiatives aimed at deepening market liquidity, enhancing transparency, and attracting long-term foreign investment amid an increasingly complex global financial environment.
