SAT JULY 04 2026-theGBJournal| Total transactions on the Nigerian equities market increased by 7.8% month-on-month to NGN1.94 trillion in May, according to the Nigerian Exchange’s (NGX) Domestic and Foreign Portfolio Investment Report, compared with N1.80 trillion recorded in April.
The improvement in overall market turnover was almost entirely driven by stronger domestic participation. Domestic transactions climbed 13.2% month-on-month to NGN1.76 trillion from NGN1.56 trillion in the previous month, reflecting increased activity from both institutional and retail investors.
Institutional transactions recorded the strongest growth, rising 18.6% over the month, while retail investor transactions advanced 6.2%, underscoring sustained confidence among local market participants.
In contrast, foreign investor participation weakened considerably.
Transactions by offshore investors declined 25.9% month-on-month to NGN183.61 billion in May from NGN247.78 billion in April, highlighting the continued caution among international portfolio managers toward Nigerian risk assets.
The weaker foreign participation contributed to a sharp increase in net capital outflows. Overall net outflows surged 141.1% month-on-month to NGN61.01 billion, compared with NGN25.30 billion in April.
The deterioration reflected net domestic outflows of NGN52.60 billion alongside net foreign outflows of NGN8.41 billion.
The latest figures reinforce the structural shift that has emerged in Nigeria’s equity market over recent years, with domestic investors remaining the dominant source of market liquidity while foreign participation continues to lag historical averages.
Looking ahead, domestic institutional investors—including pension fund administrators, asset managers and insurance companies—are expected to remain the primary drivers of market turnover in the near term.
Their sizeable asset base and relatively stable investment horizon should continue to provide support for trading activity and market liquidity.
However, the persistence of elevated yields in Nigeria’s fixed-income market could temper the pace of additional inflows into equities.
High Treasury bill and bond yields continue to offer attractive risk-adjusted returns, encouraging investors to maintain significant allocations to fixed-income securities rather than rotate aggressively into equities.
As long as interest rates remain elevated, equity market participation is likely to be concentrated in fundamentally strong companies capable of delivering earnings growth and attractive dividend yields, while broader market inflows may remain measured.
Consequently, although domestic investors are expected to continue underpinning activity on the Nigerian Exchange, sustained improvement in overall market turnover and a meaningful resurgence in foreign participation will likely depend on a moderation in fixed-income yields, improved macroeconomic stability and stronger confidence in Nigeria’s investment environment.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
