By Peter Egwuatu
There is indication that foreign portfolio investments may be on a strong rebounded with May 2025 figure rising by 88.5% to N118.91 billion. April figure was N63.07 billion.
This was partly supported by moderating fixed income yields and improved market sentiment, which boosted foreign investors’ demand in the equities market.
According to the data from the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions surged by 45.3% Month-on-Month, MoM, to N700.50 billion in May from N482.04 billion in April.
The Exchange noted that the performance was driven by the higher participation from both domestic investors which accounted for 83.0% of gross transactions and foreign investors accounting for 17.0%.
Further breakdown shows domestic investors’ stakes increased by 38.8% MoM to N581.59 billion from N418.97 billion in April, driven by a rise in transactions from retail investors, which accounted for 86.1% MoM and institutional investors 2.7% MoM.
Net flows declined by 54.0% M/M to N2.64 billion from N5.74 billion, driven by strong net foreign inflows of N13.31 billion that outweighed net domestic outflows of N10.67 billion.
Analysts from Cordros Capital stated that: “In the near term, we expect domestic investors to remain the primary drivers of transaction value, supported by an anticipated decline in fixed income yields, which is expected to sustain buying interest. Furthermore, the relative stability of the naira is likely to encourage increased participation from foreign investors in the equities market; however, prevailing global uncertainties present a downside risk to sustained inflows”.
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