Foreign Investors Offload N576 Billion In Nigerian Stocks Over Six Months.
Foreign investors have sold off equities worth N576.09 billion on the Nigerian Exchange (NGX) between January and June 2025, marking a significant 84.97% increase compared to the N311.41 billion withdrawn during the same period in 2024. According to the NGX’s June 2025 Domestic and Foreign Portfolio Investment Report, these outflows surpassed foreign inflows, which totalled N559.25 billion, resulting in a net negative foreign portfolio position of N16.84 billion over the six-month period.
The surge in foreign transactions, which reached N1.14 trillion in the first half of 2025—more than double the N540.48 billion recorded in the first half of 2024—reflects heightened activity in Nigeria’s financial markets. Analysts attribute this increase in outflows to global market volatility, particularly influenced by uncertainties surrounding US trade policies. Financial expert Johnson Chukwu, Group Managing Director of Cowry Assets Management Limited, noted that inconsistencies in global trade policies have impacted investor confidence. However, he emphasised that foreign portfolio investors remain active in Nigeria, particularly in fixed-income instruments like treasury bills, which offered attractive yields of 23-24% until recently.
Chukwu also suggested that the sell-off in equities may stem from perceptions that Nigerian stocks are overvalued. “The equity market saw gains of over 40% last year and this year, yet the fundamentals of the economy have not materially changed,” he explained. This perception may have prompted foreign investors to shift their focus to safer, high-yield options like treasury bills and Open Market Operation (OMO) instruments.
Olatunde Amolegbe, Managing Director of Arthur Stevens Asset Management Limited, described foreign portfolio investors as primarily traders seeking profit. “If they believe their positions have yielded sufficient returns, they will sell off, just like any other investor,” he said. This profit-taking behaviour has contributed to the significant outflows observed in the first half of 2025.
Despite the sell-off, Nigeria’s capital market has shown resilience. The NGX All-Share Index and market capitalisation have posted gains, with local investors playing a significant role. In the first quarter of 2024, for instance, local investors traded stocks worth N1.3 trillion, dwarfing the N213 billion traded by foreign investors, helping to rank the Nigerian stock market as one of the world’s best-performing markets.
The report also highlights broader economic challenges, including currency volatility and global geopolitical tensions, which may continue to influence investor sentiment. While the sell-off reflects caution among foreign investors, the robust participation of domestic investors and ongoing reforms by the Central Bank of Nigeria, such as a shift to a market-determined exchange rate, suggest potential for recovery and renewed interest in Nigerian equities in the future.
As Nigeria navigates these economic dynamics, stakeholders remain cautiously optimistic, with experts calling for sustained reforms to bolster investor confidence and stabilise capital flows.
