Kayode Tokede

Nigeria’s stock market yesterday suffered one of its heavy losses in one day, dropping by N4.6 trillion on investors’ profit-taking in highly capitalised listed companies on the Nigerian Exchange Limited (NGX).

Highly capitalised listed companies, such as Dangote Cement Plc, MTN Nigeria Communications Plc, and BUA Cement Plc, all dropped by 10 per cent to close at N594.00, N162.00, and N429.30 per share, respectively.

The market capitalisation of listed stock on the NGX closed yesterday at N89.885 trillion, about 4.91 per cent or N 4.6 trillion when compared to N94.526 trillion it opened for trading.

Investors in Dangote Cement stock saw a drop by N1.11 trillion in one day, as BUA Cement returns was down by N609.6 billion, amid aggressive profit-taking by investors. 

Equally, investors in MTN Nigeria Communications had their returns down by N1 trillion.

That caused a sharp five per cent drop in the NGX All-Share Index, to 141,327.30 basis points, 7,454.60 basis points or 5.01 per cent from 148,781.90 basis points, when the stock market opened for trading.

Consequently, the Month-to-Date and Year-to-Date returns settled lower at -8.3 per cent and +37.3per cent, respectively.

Sectoral performance mirrored the broader market downturn, with the NGX Industrial Goods Index (-8.6per cent), NGX Banking Index (-7.3per cent), NGX Oil & Gas Index (-4.6per cent), NGX Insurance Index (-4.3per cent), and NGX Consumer Goods Index (-2.2per cent) indices all closed lower.

Analysts attributed the downward movement in the stock market to investors’ sentiment trading over President Donald Trump’s threat of military action in Nigeria and Federal Government’s  implementation of the Capital Gains Tax (CGT). 

In a post on Truth Social, Trump said he had instructed the Pentagon to “prepare for possible action” and warned of immediate suspension of U.S. aid to Nigeria, Africa’s most populous nation and OPEC member.

President Bola Tinubu rejected Trump’s comments, calling them a misrepresentation of Nigeria’s “consistent and sincere efforts to safeguard freedom of religion and belief for all Nigerians”.

Speaking with THISDAY, Investment Banker & Stockbroker, Tajudeen Olayinka, said the N4.6 trillion drop in market capitalisation was against the backdrop of Trump’s threat and introduction of CGT by 2026.

Olayinka stated, ‘’The combination of these two factors have played a significant role in investors’ profit-taking in highly capitalised stocks on the NGX.  

“The likes of Dangote Cement, among others that dropped when the market closed, have strong forces to pull down the market. The overall negative news around the market have played a significant role.”

David Adonri, Vice Chairman, Board of HighCap Securities, said, “Short-term market adjustments are normal in a dynamic market like Nigeria’s.

“The underlying fundamentals remain strong, and the year-to-date performance highlights the resilience and depth of our capital markets.”

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