Local investors on the Nigerian Exchange Limited cut their trading activities by a significant N932bn in August, causing a decline in the total transaction value on the domestic market.
As per the Nigerian Exchange's Domestic and Foreign Portfolio Investment Report for August 2025, overall local involvement decreased by 55.87 per cent, dropping from N1.669tn in July to N736.57bn in August.
The steep drop was mainly due to the lack of large-scale transactions, which had greatly increased trading volumes in the prior month.
The decline in local activity also affected the overall market. Total transactions fell by 49.95 per cent from one month to the next, decreasing from N1.815tn in July to N908.38bn in August.
Although there was a significant decline, the activity in August remained considerably higher than during the same period in the previous year. When compared to N379.52bn in August 2024, the August 2025 value showed a 139.35 per cent rise.
A review of the August report indicated that institutional investors were primarily responsible for the decline. Their transactions dropped by 65.91 percent, decreasing from N1.152tn in July to N392.9bn in August.
Retail investors also withdrew, though to a lesser extent, with deals dropping by 33.46 per cent, from N516.5bn in July to N343.67bn in August.
Institutional investors still made up the largest portion of the market at 53 percent, while individual traders represented 47 percent.
On the other hand, foreign investors increased their involvement as their transactions grew by 17.72 percent, moving from N145.95bn in July to N171.81bn in August. Inflows amounted to N95.14bn, whereas outflows were at N76.68bn, showing a fairly even outlook.
Consequently, foreign involvement accounted for 18.91 percent of all trades in August, an increase from 8.04 percent in July. Domestic investors remained the main force, controlling 81.09 percent of transactions.
From January to August 2025, local investors conducted transactions worth N5.463tn, while foreign investors engaged in trades totaling N1.453tn, indicating that locals made up 79 percent of the activity during the first eight months of the year.
Both local and international involvement also increased significantly compared to the previous year. Local transactions almost doubled from N2.82tn in the same period of 2024, whereas international trades more than doubled from N655.5bn.
The long-term pattern indicates that local investors remain the primary source of market liquidity. In the last 18 years, domestic transactions have increased by 33.15 per cent, moving from N3.556tn in 2007 to N4.735tn in 2024. International transactions saw a rise of 38.31 per cent, increasing from N616bn in 2007 to N852bn in 2024.
Experts noted that the significant drop in August did not indicate deteriorating fundamentals, but instead was due to an unusually large block trade in July that boosted trading volumes. Block trades usually involve the buying or selling of a large number of shares in a single transaction, typically by institutional investors.
The report also emphasized the effect of currency fluctuations. The naira was valued at N1,533.55 per dollar at the close of July 2025 and marginally improved to N1,531.57 per dollar by the end of August. This level of consistency helped attract foreign investments, although local sentiment continued to be the main factor influencing total transaction volumes.
Market analysts pointed out that although foreign involvement has risen, the exchange remains significantly influenced by the actions of a small number of major local investors, whose transactions can affect volumes by hundreds of billions of naira monthly.
Provided by SyndiGate Media Inc.Syndigate.info).
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