A recent report has disclosed a 12% decline in total transactions on the Nigerian Exchange (NGX), amounting to ₦422 billion for the review period. This downturn underscores reduced trading activity in both domestic and foreign investor segments, raising concerns about market sentiment and economic conditions.
The report indicates that the decrease was driven by a combination of factors, including macroeconomic uncertainties, inflationary pressures, and subdued foreign investor participation. Analysts suggest that the persistent depreciation of the naira and high-interest rates have made the equities market less attractive compared to fixed-income instruments, leading to a shift in investor preferences.
Domestic investors continued to dominate market activity, accounting for a significant portion of the transactions. However, their participation also saw a decline, reflecting cautious investment behavior amidst rising living costs and economic instability. Foreign investors contributed a smaller share, with capital flight concerns and global market volatility further dampening their involvement.
Market experts have urged policymakers to address structural economic challenges and implement measures to boost investor confidence. Recommendations include stabilizing the exchange rate, enhancing market liquidity, and promoting initiatives that attract foreign portfolio investments.
Despite the decline, some segments of the NGX showed resilience. Sectors such as telecommunications and consumer goods recorded modest gains, supported by strong earnings reports and strategic corporate actions. Market operators believe that targeted reforms and improved macroeconomic conditions could reverse the current trend and drive renewed interest in the equities market.
The NGX remains a critical platform for capital formation and economic development in Nigeria. Stakeholders have called for collaborative efforts between regulatory bodies, government agencies, and market participants to create a more favorable environment for investment and growth.
As the market adapts to evolving economic realities, the performance of the NGX will continue to serve as a barometer for investor confidence and broader economic health in Nigeria.
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