Nigeria’s equities market closed lower on Tuesday, erasing an estimated US$740 million in investor wealth after widespread sell-offs followed the latest monetary policy decision.
The decline came after the 304th meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria, which cut the Monetary Policy Rate (MPR) by 50 basis points to 26.50 percent.
The MPC also adjusted the asymmetric corridor to +50/-450 basis points around the benchmark rate, retained the Cash Reserve Ratio at 45 percent for Deposit Money Banks and 16 percent for Merchant Banks, and maintained the Liquidity Ratio at 30 percent.
Following the decision, the benchmark All-Share Index on the Nigerian Exchange fell 0.92 percent to 194,484.61 points from 196,263.56 in the previous session.
Market capitalisation declined by about US$740 million to close at roughly $81.0 billion, down from approximately US$81.7 billion recorded a day earlier, based on prevailing exchange rates.
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The downturn trimmed the market’s year-to-date return to 24.98 percent, while market breadth closed negative with 40 losers against 27 gainers.
Traders said investors took profits and repositioned portfolios after the rate decision, triggering declines across large-cap, consumer goods and insurance stocks.
Tantalizers and Daar Communications led the losers, each shedding 10 percent to close at 4.86 naira and 2.25 naira per share respectively.
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BUA Foods dropped 9.99 percent, while Ellah Lakes fell 9.96 percent. Japaul Gold lost 9.95 percent, despite posting the highest trading volume of the session at 102 million shares.
On the gainers’ side, Jaiz Bank advanced 10 percent to 12.76 naira per share. Infinity Trust rose 9.83 percent, while FCMB gained 9.72 percent.
Fortis Global Insurance climbed 9.09 percent and Sterling Nigeria added 7.50 percent.
A total of 1.14 billion shares valued at about US$34.6 million were traded in 72,218 deals, compared with 1.3 billion shares worth roughly US$20.4 million exchanged in 95,091 transactions in the previous session.
While trading volume declined 12 percent and the number of deals dropped 24 percent, the total value of transactions rose 44 percent, indicating heavier activity in higher-priced stocks.
Analysts said the rate cut could support economic activity over time, but near-term investor sentiment remains cautious as markets assess inflation risks and liquidity conditions.
Nigeria’s equities market has been navigating a delicate environment of high inflation, elevated interest rates, and tight liquidity. The Central Bank of Nigeria (CBN) uses its Monetary Policy Rate (MPR) as the main tool to influence borrowing costs, manage inflation, and stabilise the naira.
The Nigerian Exchange (NGX), which lists major banks, consumer goods firms, and industrial companies, is sensitive to changes in monetary policy. Rate cuts can spur economic activity by lowering borrowing costs, but they may also raise concerns about inflation if liquidity is already high.
Tuesday’s market sell-off followed the 304th MPC meeting, where the CBN cut the MPR by 50 basis points to 26.50 percent. The committee also maintained high reserve requirements 45 percent for Deposit Money Banks and 16 percent for Merchant Banks and held the Liquidity Ratio at 30 percent. These measures aim to control excess liquidity while supporting lending.
Investors reacted by selling large-cap and consumer goods stocks such as Daar Communications, Tantalizers, BUA Foods, Ellah Lakes, and Japaul Gold, resulting in a loss of about $740 million in market value. At the same time, select financial stocks, including Jaiz Bank and FCMB, rose sharply, reflecting sector-specific optimism.
The NGX remains a barometer for both domestic economic sentiment and global investor confidence. With inflation still elevated and the naira under pressure, equity markets are closely watching the CBN’s next moves, as well as government policy on fiscal spending and infrastructure investment.
