In September, foreign inflows into the Nigerian Exchange Limited fell to N11.26 billion, the lowest amount of the year.
This is in line with the NGX’s most recent Domestic & Foreign Portfolio Investment Report.
The report indicated that as foreign inflows weakened, foreign investors increased the amount of their investments that they liquidated between August and September.
Foreign inflows into Nigeria in the first nine months of 2024 stood at N310.99bn higher than N108.93bn in 2023. The highest value of inflow was recorded in May 2024, N54.87bn, and it has steadily declined since then to N11.26bn in September.
In terms of foreign outflow, it worsened to N30.15bn in September compared to N24.38bn in August.
Experts have noted the unstable naira and high interest rate environment were making investors abandon the equity market in search of better yields.
The naira closed trading on the Nigerian Autonomous Foreign Exchange Market at 1652.25/$ on Friday and at its last meeting, the Monetary Policy Committee of the Central Bank of Nigeria pegged the benchmark interest rate at 27.25 per cent.
The CBN has continued to tighten the interest rate in a bid to tackle inflation. With inflation hitting 33.88 per cent in October, there are already projections that the apex bank would hike rates at its next MPC meeting albeit not aggressively.
Meanwhile, the NGX report has indicated that as of 30 September 2024, total transactions at the local bourse increased significantly by 29.90 per cent from N379.52bn (about $237.70m) in August 2024 to N493.01bn (about $307.84m) in September 2024.
The performance of the current month, when compared to the performance in September 2023 (N295.80bn) revealed that total transactions increased by 66.67 per cent. In September 2024, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 84 per cent.
“A further analysis of the total transactions executed between the current and prior month (August 2024) revealed that total domestic transactions increased by 40.23 per cent from N322.05bn in August 2024 to N451.60bn in September 2024. However, total foreign transactions decreased by 27.95 per cent from N57.47bn (about $35.99m) to N41.41bn (about $25.86m) between August 2024 and September 2024,” the report added.
Retail investors outpaced institutional investors by 28% during the reviewed month. Retail transactions climbed by 59.42% from N180.72 billion in August 2024 to N288.10 billion in September 2024, according to a comparison of domestic transactions in the present month and the previous month (August 2024).
