Nigeria’s equities market weakened on Tuesday as investors locked in profits from recent gains, dragging the benchmark index lower and wiping out N311 billion (US$214.3 million) from the market’s capitalisation.
The Nigerian Exchange Group (NGX) said the market capitalisation fell 0.33 percent to N93.66 trillion (US$64.5 billion), down from N93.97 trillion (US$64.7 billion) on Monday. The All-Share Index (ASI) slid by 487.66 points to close at 146,940.29, also a 0.33-percent drop.
The downturn halted a four-session winning streak that had lifted stocks to multi-week highs, fuelled by renewed risk appetite and improved liquidity in the financial system. But traders said many investors took advantage of the market’s strong upward run to realise profits, particularly in large- and mid-cap counters.
Market breadth was negative, with 34 companies declining compared with 21 gainers, reflecting broad-based selling pressure. Hotels and consumer stocks were among the biggest casualties. Transcorp Hotels plunged 9.95 percent to N155.60
(US$0.107) per share, while Ikeja Hotel fell 9.65 percent to N28.10 (US$0.019). Diversified conglomerate UACN lost 9.09 percent to end the session at N88 (US$0.061).
On the upside, a handful of small and mid-tier stocks posted strong advances. Learn Africa led gainers with a 9.57-percent rise to N6.30 (≈ US$ 0.0043) per share, while healthcare firm Mecure climbed 8.72 percent to N32.40 (US$0.022). Deap Capital Management added 7.50 percent to close at N1.72 (US$0.0012), and International Energy Insurance gained 6.52 percent to N2.45 (US$0.0017). Auto dealer RT Briscoe advanced 5.96 percent to N3.20 (US$0.0022) per share.
Etranzact dominated market activity, trading 1.03 billion shares valued at N7.5 billion (US$5.17 million) in what analysts described as an unusually heavy turnover for the payments company. The broader market, however, recorded reduced momentum compared with the previous week’s rally.
Despite Tuesday’s setback, the market remains sharply positive this year, with the year-to-date return at 42.76 percent, making Nigerian equities among the best performers on the continent. Analysts say the gains reflect optimism over reforms pursued by Bola Tinubu’s administration, including exchange-rate liberalisation, attempts to rein in inflation and efforts to stabilise public finances.
Background on the Nigerian Stock market
The Nigerian Exchange Limited (NGX), formerly the Nigerian Stock Exchange (NSE), is West Africa’s largest bourse and one of the continent’s most active equity markets. Established in 1960, the exchange has grown into a central hub for capital formation in Nigeria — Africa’s largest economy by population and a major crude oil producer.
Evolution and Demutualisation
After decades operating as a member-owned organisation, the NSE demutualised in March 2021, creating the Nigerian Exchange Group Plc (NGX Group) with three key subsidiaries:
- Nigerian Exchange Limited (NGX) – the operating exchange
- NGX Regulation Limited (NGX RegCo) – independent market regulator
- NGX Real Estate Limited (NGX RelCo) – property and infrastructure arm
Demutualisation aligned the exchange with global best practices, allowing it to operate commercially, attract investment and pursue strategic partnerships.
Market Structure
NGX operates several market segments:
- Equities market – the main board and premium board for top-tier listed companies
- Fixed income – FGN bonds, corporate bonds, green bonds
- Exchange-traded funds (ETFs)
- Derivatives market, formally launched in 2022
Daily trading is carried out electronically via the X-Gen trading platform.
Key Market Indicators
The NGX’s benchmark index is the All-Share Index (ASI), which tracks the performance of listed equities. Market capitalisation has risen significantly in recent years, boosted by strong interest in banking, consumer goods and energy stocks as well as currency adjustments that increased nominal stock valuations.
In 2024–2025, annual returns consistently outperformed many African markets due to:
- Local investor dominance
- High inflation pushing funds into equities as a hedge
- Reform optimism from the current administration
- Strong performances in banking and industrial stocks
Investor Base
Nigeria’s stock market is heavily dominated by domestic investors, who often account for 85–90% of monthly turnover. Foreign portfolio investment has fallen sharply over the past decade due to:
- Currency volatility and FX repatriation risks
- Political uncertainty
- Security concerns in the Niger Delta and northern Nigeria
This has increased the exchange’s vulnerability to sentiment swings among local institutional and retail investors.
Strengths and Opportunities
Despite these challenges, NGX remains one of Africa’s most dynamic markets, with several key advantages:
- Large domestic investor base driven by pension funds, investment banks and retail traders
- Growing fintech ecosystem, enabling wider participation and faster settlement
- Increasing derivative products, which may deepen liquidity
- Potential listings from oil, telecoms and fintech sectors if reforms succeed
- Government reforms — including FX liberalisation and efforts to attract foreign capital — that could boost market depth
In 2024–2025:
- Banking stocks surged due to recapitalisation requirements imposed by the central bank.
- Telecom and industrial stocks benefited from currency devaluation, which boosted their naira-denominated revenues.
- Energy stocks advanced on expectations of renewed investment following reforms in the petroleum sector.
- Pension funds increased their allocation to equities amid high inflation.
- Retail participation jumped, aided by mobile trading apps and social-media–driven investment culture.
Role in Nigeria’s Economy
The exchange plays a critical role in:
- Mobilising long-term capital for businesses
- Providing a platform for government and corporate bond issuance
- Increasing transparency and governance among listed companies
- Offering a barometer of investor confidence in economic reforms
As Nigeria pushes for economic diversification beyond oil, the NGX is positioned to serve as a key engine for investment and growth.
