Investors Suffer N1.17tn Loss as Bearish Trading Returns to NGX

The Nigerian equities market resumed bearish trading on Monday, wiping off a fresh N1.17tn from investors’ portfolios as sell pressure intensified across key sectors. The downturn, which marks a continuation of the volatile trend witnessed in recent weeks, saw major blue-chip stocks dragged into negative territory amid renewed profit-taking, cautious sentiment, and persistent macroeconomic uncertainties.

According to market data from the Nigerian Exchange (NGX), the market capitalisation dipped significantly as institutional and retail investors offloaded holdings in banking, industrial goods, consumer goods and energy stocks. The All-Share Index (ASI) also recorded a notable decline, reflecting the extent of the sell-offs that swept across most counters during the trading session. Analysts attributed the bearish momentum to investors’ reactions to rising inflation, fluctuating exchange rates, and concerns surrounding interest rate adjustments, which have made fixed-income instruments more attractive relative to equities.

Key heavyweights such as Dangote Cement, MTN Nigeria, BUA Cement, Access Holdings, and Zenith Bank experienced declines, contributing largely to the overall market loss. Traders noted that the sustained sell pressure indicates a shift toward capital preservation as investors brace for potential economic headwinds in the coming months. The financial services sector, which had seen a streak of positive sentiment earlier, also faltered due to renewed concerns about regulatory changes and their potential impact on liquidity and profitability.

Market analysts explained that the recent bearish performance is partly driven by uncertainties surrounding government fiscal policies, fuel pricing dynamics, and foreign exchange reforms. The lingering effects of tight monetary policies have also affected market confidence, making investors more conservative. Foreign portfolio investors, who had shown growing interest in Nigerian assets following improved FX liquidity, are now adopting a wait-and-see stance due to global economic risks and geopolitical concerns.

Despite the drop, some analysts believe the market remains fundamentally strong and may rebound once macroeconomic indicators begin to stabilise. They point out that many stocks are currently undervalued, presenting long-term buying opportunities for investors willing to withstand short-term volatility. However, they caution that recovery may be gradual unless clear policy direction and stronger economic signals emerge from the fiscal and monetary authorities.

The NGX’s sectoral performance showed broad declines, with the industrial goods index leading the dip, followed closely by banking, consumer goods, and insurance sectors. Energy stocks also weakened as global oil market uncertainties continued to affect investor appetite. The depreciation of the naira in the parallel market resulted in concerns about increased operating costs for companies reliant on imported raw materials, further dampening sentiment.

Meanwhile, market operators emphasised the need for coordinated policy actions to restore confidence and stabilise the investment climate. They urged the government to accelerate reforms aimed at reducing inflation, improving FX stability, and supporting productive sectors of the economy. With Nigeria still battling fiscal pressures and rising public debt, analysts warn that investor confidence may remain fragile unless clear economic recovery measures are communicated.

Investor groups have called on regulators and policymakers to provide more clarity on recent tax proposals, banking sector recapitalisation, and energy sector reforms. They argue that inconsistent policy messaging has contributed to market jitters, pushing investors toward safer asset classes. Some traders noted that the persistent outflow of foreign investors has also amplified volatility, leaving local investors to bear the weight of sudden market swings.

The bearish session follows a brief period of recovery last week during which the market posted marginal gains driven by bargain hunting. However, the latest downturn suggests that profit-taking may continue as the year draws to a close, with many institutional investors adjusting their portfolios ahead of year-end reporting cycles.

In the broader economic landscape, experts warn that continued stock market losses could dampen corporate expansion plans, hinder capital raising efforts, and weaken overall economic growth. A prolonged bearish run may also affect pension fund managers, insurance firms, and asset managers whose portfolios are heavily exposed to equities.

In concluding remarks, market analysts stress that sustained stability in Nigeria’s economic environment is crucial to halting the market’s decline. They emphasise that once FX volatility eases, inflation moderates, and government reforms begin to yield tangible outcomes, investor sentiment is likely to improve.

For now, the Nigerian equities market remains under pressure, with investors losing N1.17tn in a single session—a stark reminder of the delicate balance between economic policy execution and market confidence.