Trading activity on the Nigerian Exchange Limited (NGX) saw a sharp contraction in August 2025, as domestic investors reduced their participation by N932 billion, according to the NGX’s latest Domestic and Foreign Portfolio Investment Report.
The report showed that total domestic trades dropped by 55.87%, from N1.669 trillion in July to N736.57 billion in August.
Analysts linked the slump largely to the absence of block trades, which had boosted July’s volumes.
The overall market was dragged down as well, with total transactions declining 49.95% month-on-month, from N1.815 trillion in July to N908.38 billion in August.
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Despite the steep monthly fall, activity remained significantly higher than a year earlier.
Compared with N379.52 billion in August 2024, last month’s figure represented a 139.35% increase.
Institutional investors drove most of the pullback, cutting their trades by 65.91%, from N1.152 trillion in July to N392.9 billion in August.
Retail investors also slowed activity, but less sharply, with a 33.46% decline, from N516.5 billion in July to N343.67 billion. Institutional players still dominated the market, accounting for 53% of transactions, while retail investors contributed 47%.
In contrast, foreign participation increased. Foreign investors’ trades rose 17.72%, from N145.95 billion in July to N171.81 billion in August.
Inflows stood at N95.14 billion, while outflows were N76.68 billion, suggesting balanced sentiment. As a result, foreign activity accounted for 18.91% of total trades, up from 8.04% in July.
Between January and August 2025, domestic investors traded N5.463 trillion, compared with N1.453 trillion by foreign investors, giving locals a 79% share of market activity.
Both domestic and foreign transactions rose strongly year-on-year, with domestic trades nearly doubling from N2.82 trillion in the same period of 2024, while foreign trades more than doubled from N655.5 billion.
Market analysts told Punch that the August decline was not a reflection of weaker fundamentals but rather the impact of July’s unusually large block trade.
Block trades, usually executed by institutions, involve the purchase or sale of a substantial number of shares in a single deal and can inflate monthly volumes.
The report also highlighted that naira movements remained relatively stable, trading at N1,533.55/$ in July and slightly strengthening to N1,531.57/$ in August.
This stability supported foreign inflows, though the NGX remains heavily dependent on the trading decisions of a few large domestic investors.
Image Credit: Punch Newspapers
