The Nigerian Exchange (NGX) has erased approximately N1.8 trillion in investor wealth over four consecutive trading days in November, driven by widespread selling pressure tied to an impending capital gains tax and escalating international tensions.
The benchmark NGX All-Share Index closed Thursday at 150,026.55 points, down from 154,123.62 points the previous Friday. This retreat has reduced the index’s year-to-date return from 49.74% to 45.76%, marking a sharp reversal after October’s strong performance.
Market participants attribute the decline primarily to anxiety over a planned 25% capital gains tax on stock profits exceeding N150 million, slated for introduction in January 2026. Institutional players and high-net-worth individuals are liquidating holdings to lock in gains before the levy takes effect, fearing a significant reduction in future returns.
Local asset managers also highlight routine profit-taking after the prior month’s surge, alongside a migration of funds toward fixed-income securities. Recent government bond auctions, including a heavily oversubscribed Eurobond offering, reflect growing preference for lower-risk instruments amid policy uncertainty.
Sectoral Declines and Trading Activity
Banking stocks absorbed the brunt of the sell-off, with major lenders such as Access Holdings, Guaranty Trust Holding Company, Zenith Bank, and Ecobank Transnational posting notable losses as large funds trimmed exposures. United Bank for Africa, First City Monument Bank, and Lafarge Africa showed relative stability but failed to offset the broader downturn.
Consumer goods companies—including Dangote Sugar Refinery, International Breweries, Guinness Nigeria, and Transnational Corporation—faced similar pressure, weighed down by expectations of higher fourth-quarter operating costs and softening demand.
Trading volume remained elevated, with more than 2.4 billion shares valued at N77 billion exchanged during the week. Analysts interpret this as evidence of portfolio rotation rather than a complete market exit, with capital shifting toward cash equivalents and defensive assets.
External Risks Amplify Caution
Adding to domestic concerns, statements from U.S. President Donald Trump threatening potential military measures against Nigeria over reported human-rights issues have prompted foreign portfolio managers to reduce exposure. The rhetoric has fueled speculation of accelerated outflows if tensions persist.
Outlook and Policy Watch
Sentiment leans cautious ahead of Friday’s session, with attention focused on any signals from fiscal policymakers regarding the tax framework. Without mitigating adjustments, November risks becoming the year’s weakest month, potentially undermining confidence built during the October rebound.
The 25% capital gains threshold awaits final parliamentary endorsement before its scheduled January 2026 rollout.
