Kayode Tokede
The Nigerian stock market continued its impressive growth trajectory in May 2026, with domestic investors further consolidating their dominance amid rising market activity, improving investor confidence and sustained economic reforms that continue to attract capital into equities.
Latest trading statistics released by Nigerian Exchange Limited (NGX) showed that total transactions on the nation’s bourse climbed to N1.943 trillion in May 2026, representing a 7.79 per cent increase from N1.803 trillion recorded in April. Even more remarkable was the year-on-year performance, which revealed that market turnover surged by 177.42 per cent compared with N700.5 billion recorded in May 2025.
According to the NGX Domestic and Foreign Portfolio Investment Report, domestic investors remained the major drivers of trading activity in May, accounting for approximately 91 per cent of total transactions executed during the month. Domestic transactions rose by 13.15 per cent from N1.555 trillion in April to N1.760 trillion in May.
In contrast, foreign portfolio transactions declined by 25.9 per cent from N247.78 billion in April to N183.61 billion in May, suggesting a temporary slowdown in offshore participation despite growing interest in Nigerian assets. The report further indicated that the value of transactions executed by domestic investors exceeded those of foreign investors by about 82 per cent during the review period.
Market observers said the trend reflects stronger participation from local institutional investors, increased retail engagement, and renewed confidence in the domestic economy as macroeconomic reforms continue to take shape.
Speaking on the development, the Group Managing Director and Chief Executive Officer of NGX Group, Temi Popoola, said the sustained rise in domestic participation demonstrates the growing maturity and resilience of Nigeria’s capital market.
“The continued expansion in domestic market activity reflects increasing investor confidence in the long-term prospects of the Nigerian economy and the strength of our capital market ecosystem. We are particularly encouraged by the growing participation of institutional investors, whose activities contribute significantly to market liquidity, stability and efficient price discovery. While foreign portfolio flows remain important to market development, the strong performance of domestic investors highlights the success of ongoing efforts to deepen local participation and build a more resilient market capable of supporting economic growth and wealth creation,” Popoola said.
Similarly, industry stakeholders noted that the current structure of market participation is helping to insulate the Exchange from the volatility often associated with foreign portfolio flows.
Historically, frontier markets such as Nigeria have experienced periods of significant market fluctuations whenever foreign investors entered or exited positions in large volumes. However, the increasing dominance of domestic investors is gradually reducing the market’s vulnerability to such shocks.
Institutional Investors Lead the Charge
A closer examination of domestic transactions showed that institutional investors remained the dominant force in the market during May.
Institutional participation increased by 18.59 per cent, rising from N871.38 billion in April to N1.033 trillion in May. Retail investors also increased their market activities, although at a slower pace, with transactions growing by 6.22 per cent from N683.74 billion to N726.27 billion. Consequently, institutional investors outperformed retail investors by approximately 18 per cent during the month.
Analysts attributed the surge in institutional activity to improved corporate earnings, attractive dividend yields, and the growing allocation of funds into equities by pension fund administrators, asset managers and other long-term investors seeking superior returns.
According to market analyst and Chief Executive Officer of APT Securities and Funds Limited, Mallam Garba Kurfi, the growing influence of institutional investors is a positive signal for the long-term development of the Nigerian capital market.
“What we are witnessing is a gradual strengthening of the domestic investment base. Institutional investors are becoming more active because many listed companies continue to deliver impressive earnings despite economic challenges. At the same time, the reforms in the foreign exchange market and improving macroeconomic indicators are creating optimism about future corporate performance. The decline in foreign participation should not necessarily be viewed negatively. Global investors often adjust their portfolios based on international market conditions, interest rates and risk considerations. What is important is that domestic investors are increasingly filling the gap and providing stability to the market,” Kurfi said.
He added that sustained domestic participation would help improve liquidity and support long-term capital formation across key sectors of the economy.
Long-term Growth Story Remains Intact
Beyond the monthly figures, the latest data also highlighted the remarkable transformation of Nigeria’s equities market over the last two decades.
Over a 19-year period, domestic transactions increased by 160.83 per cent from N3.556 trillion in 2007 to N9.275 trillion in 2025. Foreign transactions recorded even stronger growth, rising by 329.87 per cent from N615.6 billion in 2007 to N2.648 trillion in 2025.
The long-term trend reflects the evolution of Nigeria’s capital market into one of Africa’s largest investment destinations, despite episodes of economic downturns, exchange rate pressures and global financial uncertainties.
In 2025, domestic investors accounted for approximately 78 per cent of total market transactions, while foreign investors represented 22 per cent. The pattern has become even more pronounced in 2026.
As of May 31, cumulative domestic transactions stood at N6.922 trillion, representing 87.67 per cent of total market activity for the year. Foreign transactions amounted to N973.4 billion, accounting for just 12.33 per cent.
Market operators said this shift reflects the growing confidence of local investors in Nigerian listed companies, many of which have posted robust earnings and declared attractive dividend payouts over the last year.
Several banking, telecommunications, industrial and consumer goods stocks have continued to attract significant investor interest as market participants position for stronger earnings growth and economic recovery.
Foreign Investors Expected to Return
Despite the recent decline in foreign portfolio transactions, analysts remain optimistic that international participation could rebound in the coming months.
The ongoing liberalisation of the foreign exchange market, improving liquidity conditions and declining policy uncertainty are expected to enhance Nigeria’s attractiveness to offshore investors.
In recent months, global investment banks and emerging market funds have increasingly highlighted Nigeria as a potential beneficiary of capital reallocation flows into frontier and emerging markets.
Economic reforms aimed at improving fiscal sustainability, exchange rate transparency and investor confidence are also expected to support renewed foreign interest.
For now, however, domestic investors appear firmly in control of market activity.
The strong participation of pension funds, asset managers, insurance firms and retail investors is helping to sustain liquidity and reinforce confidence in the market’s long-term prospects.
As Nigeria seeks to mobilise capital for economic growth, infrastructure development and industrial expansion, experts believe the growing strength of domestic investors could become one of the market’s most significant advantages.
The latest NGX data suggests that the Nigerian equities market is increasingly becoming less dependent on foreign portfolio flows and more anchored on local capital. If the current momentum is sustained, market operators say the Exchange could witness another record year of activity, reinforcing its role as a critical platform for wealth creation and economic development.
For investors and policymakers alike, the message from May’s trading figures is clear: domestic confidence in Nigeria’s capital market remains strong, and that confidence is translating into unprecedented levels of market participation.