Rising inflows signal renewed confidence, yet higher outflows reveal cautious market sentiment amid shifting dynamics…….
Foreign investor activity on the Nigerian Exchange Limited (NGX) rebounded strongly in the first quarter of 2026, with inflows jumping by 78 percent year-on-year to N393.68 billion, up from N221.62 billion recorded in the same period last year.
The surge points to a renewed appetite for Nigerian equities among offshore investors. However, the optimism is tempered by a parallel rise in capital exits, as foreign outflows climbed 31.2 percent to N420.37 billion year-to-date, highlighting a more cautious and fluid investment environment.
Data from the Exchange’s latest Domestic and Foreign Portfolio Participation report shows that while more foreign funds are entering the market, a significant portion is also being pulled out, suggesting that investors are actively rebalancing positions rather than making long-term commitments.
On a monthly basis, trading activity gained momentum in March. Total transactions increased by 13.1 percent to N1.744 trillion, compared to N1.542 trillion in February, reflecting improved market participation and liquidity.
Despite the spike in foreign activity, domestic investors continue to dominate the market. In March alone, local participation exceeded foreign transactions by about 66 percent, reinforcing the critical role of domestic capital in sustaining market stability.
A closer look at month-on-month performance reveals diverging trends. Domestic transactions posted modest growth of 3.72 percent, rising to N1.456 trillion from N1.403 trillion in February. In contrast, foreign transactions more than doubled, surging by 107.74 percent to N288.82 billion from N139.03 billion.
Within the domestic segment, institutional investors maintained a clear lead over retail participants. Institutional trades rose by 6.95 percent to N914.23 billion, while retail activity edged down slightly by 1.3 percent to N541.37 billion.
The data paints a picture of a market regaining international attention, but still navigating underlying uncertainties. While foreign inflows are picking up pace, the simultaneous rise in outflows suggests investors remain selective, balancing opportunity with risk in a volatile economic landscape.
As the year progresses, the interplay between foreign confidence and domestic resilience will likely shape the trajectory of Nigeria’s capital market.
