The Nigerian stock market witnessed a significant foreign investment outflow of N20.19 billion in January 2025, fueling concerns over liquidity and investor confidence.
According to data from the Nigerian Exchange Limited (NGX), foreign outflows surged to N45.85 billion, far surpassing the N25.66 billion foreign inflows recorded during the month. This represents a 13.2% increase in outflows compared to December 2024, while inflows dropped marginally by 2.3%.
On a year-on-year basis, the disparity is even more striking—foreign outflows in January 2025 were 190.6% higher than the N15.78 billion recorded in January 2024.
This trend could further weaken the Naira, as foreign investors continue selling off local assets to repatriate funds. The external reserves are also at risk, as declining foreign participation affects overall market stability.
Domestic Investors Still in Control
Despite the capital flight, domestic investors remained dominant in the market, executing 76% of total transactions. However, their overall activity dropped by 11.71% from N606.91 billion in December 2024 to N535.54 billion in January 2025.
- Retail investors saw a 33.1% increase in transactions, rising from N200.87 billion in December 2024 to N267.35 billion in January 2025.
- Institutional investors, on the other hand, recorded a 33.95% decline, with transactions dropping from N406.04 billion to N268.19 billion over the same period.
Market Outlook
With total transactions on the NGX falling 9.89% month-on-month to N607.05 billion, analysts warn that sustained foreign outflows could deepen market volatility.
The question remains: Can the local market absorb this pressure, or will more investors follow suit in pulling out?
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