The Nigerian Exchange Limited (NGX) reported that the total transactions in Nigeria’s equity market decreased by 36% in April, amounting to N346.23 billion. This decline, from N538.54 billion in March, is indicative of cautious investor sentiment due to ongoing market volatility. The NGX All-Share Index notably plummeted by N3.57 trillion in April, largely influenced by policy announcements favoring fixed-income securities from the Central Bank of Nigeria (CBN).
A detailed analysis shows that domestic transactions fell by 49.27% to N225.40 billion in April, while foreign transactions increased by 28.19% to N120.83 billion during the same period. Institutional investors outperformed retail investors by 10%, with retail transactions decreasing by 54.89% to N100.77 billion and institutional transactions declining by 43.58% to N124.63 billion.
Over a 16-year span, domestic transactions decreased by 10.94% to N3.167 trillion in 2023, while foreign transactions dropped by 33.28% to N411 billion. In 2023, domestic transactions comprised 89% of total transactions, with foreign transactions making up the remaining 11%.
The NGX All-Share Index’s significant decline in April was influenced by various CBN policy announcements, including a new commercial bank recapitalization plan aiming to raise N4 trillion in fresh capital over two years and a 200 basis points increase in the benchmark interest rate by the Monetary Policy Committee (MPC), from 22.75% to 24.75%. This led to intensified sell-offs, resulting in a 6% decline in the local bourse, with the index closing at 98,225.63 points, falling below the 100,000-point threshold reached at the end of March 2024.
Source: nairametrics
