SUN JAN 05 2025-theGBJournal| Total transactions in the local bourse declined by 12.0% m/m to N442.34 billion in November (Oct: N502.73 billion), according to the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX).
We highlight that the lower participation in the local bourse may be primarily attributed to investors’ preference for debt securities due to attractive yields in the fixed-income market.
Specifically, domestic inflows (90.7% of gross transactions) dipped by 11.8% m/m to N401.40 billion (October: N455.27 billion) due to a decline in collections from institutional investors (-27.8% m/m) amid increases from retail investors (+14.9% m/m).
On the other hand, foreign inflows (9.3% of gross transactions) dropped after a month of expansion, declining by 13.7% m/m to N40.94 billion in November (October: N47.46 billion).
While we expect domestic investors to continue to contribute the most to total transaction value, we think buying activities, generally, will be constrained by elevated yields in the fixed income market.
Additionally, we think the ongoing geopolitical tensions are likely to constrain FPI participation in the Nigerian stock exchange market.
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