The total transactions at the nation’s bourse increased by 50.48% from N357.88bn in February to N538.54bn in March 2024, according to the Nigerian Exchange Limited (NGX) report on domestic and foreign portfolio participation in equities for March 2024. Thus bringing the total transaction value in Q1 2024 to N1.55trn, a significant surge of 192% from N530.23bn in Q1 2023. Looking at the transaction value breakdown, domestic investors continue to dominate market activities with a participation rate of 86.2% vs 13.8% for foreign investors in Q1 2024.

Total participation by foreign investors (inflow and outflow) was up by 296.9% y/y to N213.18bn in Q1 2024 from N53.71bn in Q1 2023. The report showed that foreign investments represented 13.77% of total equity transactions of N1.5trn compared to 10.13% a year ago. FPI inflow rose significantly by 415% y/y to N93.37bn in Q1 2024 from N18.12bn (Q1 2023), while outflow also rose by 237% to N119.81bn from N35.59bn in the corresponding quarter of 2023. On a m/m basis, the total foreign investments grew to N94.28bn in March, a 43% increase compared to N65.81bn in February.

The increase in liquidity and greater involvement of Foreign Portfolio Investors (FPIs) during the first quarter of 2024 can be attributed to the actions taken by the CBN governor to address the backlog of foreign exchange (FX) transactions and rebuild trust in the market. While these efforts are praiseworthy, it's important to emphasise that complementary measures must accompany the actions of monetary authorities on the fiscal front. This is crucial to ensure a lasting improvement in FX supply, leading to the accumulation of reserves and a sustained boost in market liquidity.