By Seun Ibiyemi and Sofiyyah Layole
Nigeria’s capital market suffered another sharp decline this week as renewed geopolitical tension, specifically triggered by President Donald Trump’s threat of military intervention in Nigeria, severely unsettled investors.
Investors have so far lost a staggering ₦859 billion in market value in two days.
The sustained sell-off saw the All-Share Index (ASI) fall by 0.72 percent on Tuesday, compounding Monday’s decline and pushing the total loss for the week to 0.97 percent, according to data from the Nigerian Exchange (NGX).
Consequently, the market’s year-to-date (YtD) return dropped to 48.29 percent, pulling back from the impressive nearly 50 percent return recorded just last week.
The financial data confirmed the retreat: the ASI depreciated from 154,126.46 points on Friday to 152,629.6 points by the close of trading on Tuesday, while the market capitalization tumbled from ₦97.829 trillion to ₦96.970 trillion within the same period, signaling sustained bearish momentum.
Analysts at Vetiva Research, however, caution against interpreting the sell-off as a full market reversal. They suggest the pressure is more indicative of healthy profit-taking, an expected action during a bull run, noting that the market remains in a stable bullish regime. That said, they could not rule out the possibility of further downside in large-cap stocks that posted strong gains coming into this week.
The recent losses underscore the vulnerability of market sentiment to sudden global political developments.
The Nigerian equities market had surged by about 8 percent in October, driven by improved investor optimism around government reforms, stable foreign exchange rates, and positive corporate earnings.
However, investor confidence has been shaken by fears that Trump’s remarks which accused Nigeria of failing to protect Christian minorities and threatened potential U.S. military intervention could severely heighten Nigeria’s risk premium, discourage foreign inflows, and weaken the outlook for Nigerian assets.
Meanwhile, attention in the financial market has shifted to the Central Bank of Nigeria (CBN), which is scheduled to hold its first Treasury Bills (T-bills) Primary Market Auction (PMA) for November on Wednesday, November 5.
The CBN plans to offer a total of ₦650 billion across three maturities, covering 91 days, 182 days and 364 days bills. This auction will be balanced by maturing bills worth a substantial ₦662.75 billion, which is expected to inject liquidity into the system.