Nigeria's stock market is displaying contrasting trends, with weekly trading showing mixed performance while foreign investor participation has declined dramatically in recent months.

Weekly Market Performance Reveals Split Trends

The Nigerian Exchange concluded its latest trading week with conflicting signals. Market capitalization rose by 0.19 percent, gaining N130 billion to close at N68.751 trillion, up from the previous day's N68.621 trillion. This increase was primarily attributed to United Bank for Africa's additional shares listing on the NGX.

However, the All-Share Index painted a different picture, dropping 0.14 percent or 154.40 points to close at 109,028.62, down from 109,183.02. This marked the third consecutive daily loss for the index during the week.

Trading activity showed positive market breadth with 30 advancing stocks outpacing 22 declining ones. Red Star Express led the gainers, soaring 10 percent to close at N6.71, followed by University Press which climbed 9.82 percent to N4.36 per share. Other notable performers included ABC Transport (up 9.69 percent to N2.49) and McNicholas (rising 9.05 percent to N2.29).

On the downside, Northern Nigeria Flour Mills suffered the steepest decline, falling 9.97 percent to N118.70, while Transcorp Hotel dropped 9.95 percent to N138.50 per share.

The week's trading volume totaled 637.54 million shares worth N18.122 billion across 15,927 transactions, representing a decrease from the previous period's 1.65 billion shares valued at N19.098 billion in 26,176 transactions. Tantalizer dominated trading activity with 145.08 million shares worth N384.45 million.

Aruna Kebira, managing director of Globalview Capital Ltd., explained that the divergence between market capitalization and the All-Share Index resulted from UBA's rights issue of 6.8 billion units, which increased the bank's outstanding shares from 34.199 billion to 41.039 billion. He noted that investors are beginning to take profits, particularly on dividend-paying stocks.

Foreign Investment Sees Dramatic Decline

A more concerning trend has emerged in foreign investor participation, which plummeted by 90.9 percent in April 2025. Foreign transactions totaled just N63.07 billion (approximately $39.50 million), a sharp drop from March's N699.89 billion (about $455.41 million).

This dramatic decline contrasts with domestic investor activity, which showed resilience with a modest 0.8 percent increase to N418.97 billion in April, up from N415.62 billion in March. Domestic investors now account for 74 percent more transaction value than their foreign counterparts.

The Nigerian Exchange attributed the foreign investment decline to the absence of large block trades that had boosted March figures, along with ongoing concerns about foreign exchange volatility and repatriation challenges that continue to deter international investors.

Domestic Investors Drive Market Activity

The data reveals a clear shift toward domestic market dominance. Throughout 2024, local investors accounted for approximately 85 percent of total market transactions, while foreign participation represented only 15 percent. This trend has continued into 2025, with domestic transactions reaching N1.837 trillion compared to foreign transactions of approximately N877.12 billion.

Despite the month-on-month decline, April 2025 activity remained robust compared to the previous year, with total transactions rising 39.22 percent from April 2024's N346.23 billion. However, overall April activity fell 56.79 percent from March's N1.1155 trillion to N482.04 billion.

Within the domestic market, institutional investors maintained their edge over retail participants by 14 percent in April. While retail participation declined 8.02 percent to N181.31 billion, institutional activity grew 8.77 percent to N237.66 billion.

Long-term Growth Despite Recent Volatility

Looking at broader trends, both domestic and foreign investor activity have shown substantial growth over the past 18 years. From 2007 to 2024, domestic transactions increased 33.2 percent from N3.556 trillion to N4.735 trillion, while foreign transactions expanded 38.31 percent from N616 billion to N852 billion.

The improved domestic investor confidence appears driven by relative macroeconomic stability, attractive corporate earnings releases, and sustained institutional investor participation, suggesting underlying market strength despite recent foreign investment volatility.