Nigeria’s equities market opened the new trading week on a slightly bearish note as the All-Share Index (ASI) of the Nigerian Exchange (NGX) dipped by 0.25%, closing at 153,739.11 points. The modest decline erased approximately N244.9 billion in market capitalization, bringing the total down from N97.8 trillion to N97.5 trillion. The session’s downturn followed sustained selloffs in banking, oil & gas, and consumer goods stocks, signaling a mild correction after October’s strong rally.
Market observers noted that the decline came amid a flurry of geopolitical tension sparked by a controversial post from U.S. President Donald Trump, who threatened to “send troops” to Nigeria over alleged religious killings. The comment briefly rattled investor sentiment both domestically and abroad, though market analysts maintain that the impact was more psychological than fundamental.
According to analysts interviewed by Nairametrics, the day’s losses were primarily due to profit-taking by investors locking in gains after several consecutive weeks of market advances. “This is not panic selling,” one analyst explained. “After October’s spectacular run, it’s natural for investors to rebalance portfolios and take profits. The Trump comment only added a temporary emotional overlay to an already overdue market pause.”
October’s Rally and the Return of Volatility
October 2025 capped one of the strongest months of the year for Nigerian equities, with the ASI climbing 8%, its second-best monthly performance after July’s impressive rally. The market’s momentum was fueled by robust third-quarter corporate earnings, foreign portfolio inflows, and a stronger naira, which boosted investor confidence in local assets.
However, as the new month began, the Nigerian Exchange showed signs of cooling. The rally that lifted stocks in consumer goods, financials, and energy sectors began to taper off as traders reassessed valuation levels and reacted to fresh macroeconomic signals.
Friday’s positive close had briefly lifted hopes for an extended bullish run, but the market’s inability to maintain momentum on Monday reflected short-term caution rather than a structural shift in sentiment.
Naira Weakens Slightly, But FX Market Remains Stable
In the foreign exchange market, the naira weakened slightly against the U.S. dollar, closing at N1,438/$1 at the official window—down from N1,422.2/$1 recorded last Friday. Despite this minor pullback, the local currency remains on one of its most stable runs in nearly two years. October’s performance was particularly remarkable, marking the naira’s best monthly showing since May 2024, supported by improved foreign reserves and reduced speculative demand.
Analysts believe the current exchange rate stability, alongside improving oil revenues and capital inflows, provides a solid macroeconomic backdrop for continued equity market recovery once short-term corrections subside.
Market Breadth and Sectoral Performance
Market breadth remained negative, with 24 gainers against 39 decliners, reflecting a general decline in sentiment. Union Dicon Salt Plc (+9.93%) led the gainers, followed closely by Omatek Ventures Plc (+9.92%). On the losing side, Honeywell Flour Mills Plc (-10.00%) and Northern Nigeria Flour Mills Plc (-9.98%) were the biggest laggards, weighed down by profit-taking in the consumer goods segment.
Trading activity, however, was upbeat despite the price declines. Total transaction volume rose by 18% to 627 million units, valued at N25.1 billion. UBA Plc emerged as the most active stock in both volume and value, exchanging 136 million shares worth N5.53 billion. The strong participation suggests that investors remain engaged and that the market pullback was more of a technical adjustment than a sign of broad withdrawal.
Analysts’ Outlook: Market Still in Positive Territory
Despite the mild decline, analysts remain optimistic about the medium-term trajectory of the Nigerian equities market. They cite robust corporate earnings, improving fiscal stability, and positive investor sentiment as key supports for further growth. The banking sector continues to attract interest due to its earnings resilience, while the consumer goods and industrial sectors benefit from steady domestic demand.
An investment analyst at United Capital Research observed, “The market has absorbed a lot of positive news in recent weeks. It’s only natural for investors to take a breather. The fundamentals remain solid—corporate profitability is improving, inflationary pressure is easing, and FX stability is boosting confidence.”
Another analyst added that while global headlines, such as Trump’s remarks, may trigger temporary volatility, Nigeria’s market fundamentals have become less sensitive to external noise thanks to stronger macroeconomic coordination and renewed foreign investor interest.
Conclusion: Brief Jitters, Long-Term Stability
In essence, the 0.25% decline on Monday reflects a healthy market correction rather than a trend reversal. The reaction to Trump’s controversial statement was largely short-lived, and the underlying sentiment remains constructive.
With trading volumes still robust and local fundamentals intact, analysts expect Nigerian equities to remain one of Africa’s most attractive investment destinations through the fourth quarter of 2025. As the earnings season continues and macroeconomic reforms deepen, the NGX could see renewed upward momentum once the current profit-taking phase runs its course.
