By Joanna Muna | AWC News, Lagos
The Nigerian equities market suffered one of its worst single-day plunges in recent history last Thursday, wiping out a staggering ₦4.64 trillion from investors’ wealth, amid mounting macroeconomic uncertainty, rising interest rates, and waning investor confidence in the government’s fiscal direction.
According to data from the Nigerian Exchange Limited (NGX), the All-Share Index (ASI) fell sharply by 8.5 percent, closing at 84,390.23 basis points, down from 92,164.65 points the previous day. The market capitalisation followed suit, tumbling from ₦50.46 trillion to ₦45.82 trillion, marking a massive loss of ₦4.64 trillion in just 24 hours.
Global and Domestic Pressures Combine
Analysts attribute the sudden market rout to a combination of factors — including foreign investors’ exit, the persistent depreciation of the naira, and heightened uncertainty around monetary policy tightening by the Central Bank of Nigeria (CBN).
“The market reacted sharply to fears surrounding liquidity squeeze and foreign exchange instability,” said Dr. Ifeoma Adigwe, a senior capital market analyst at Bluecrest Advisory. “Investors are adopting a wait-and-see attitude, preferring fixed income assets over equities, given the rising yields in the bond market.”
Sectors Hit Hard
Virtually all major sectors closed deep in the red. The banking sector led the decline, with top-tier banks such as GTCO, Zenith Bank, Access Holdings, and FBN Holdings losing between 9% and 10% each. The industrial goods sector, dominated by Dangote Cement and BUA Cement, also saw steep declines following reports of reduced institutional participation.
Oil and gas equities were not spared, as Seplat Energy and Oando Plc both dipped amid sliding global crude prices and fresh anxiety over Nigeria’s oil production outlook.
Investor Sentiment Turns Bearish
Market operators described the sell-off as a “panic correction,” triggered by fears of further depreciation of the naira and uncertainties surrounding fiscal reforms.
According to Mr. Tunde Ogun, CEO of CapitalMap Securities, “Investors are increasingly jittery over policy inconsistency. The CBN’s recent interest rate hikes to curb inflation are inadvertently pushing investors away from risk assets like equities. Unless confidence is restored, the bearish momentum could linger.”
CBN’s Stance and Economic Implications
While the CBN under Governor Olayemi Cardoso has repeatedly stressed its commitment to stabilizing the naira and curbing inflation, the market appears unconvinced. The sharp losses are seen as a sign that investors are skeptical of short-term recovery measures.
Economists warn that the massive market dip could further weaken foreign direct investment (FDI) inflows and raise concerns about Nigeria’s macroeconomic stability.
“The loss of ₦4.6 trillion in one day is not just about stocks — it’s a reflection of deep structural worries,” said a financial economist at the University of Lagos. “If confidence is not restored quickly, capital flight and reduced investor participation could worsen unemployment and slow economic recovery.”
Regulators Move to Calm Markets
In a late evening statement, the Securities and Exchange Commission (SEC) and the NGX urged investors to remain calm, noting that market fundamentals remain strong. They attributed the fall to “temporary profit-taking and macroeconomic realignments.”
However, market watchers insist that beyond statements, policy clarity and investor assurance are crucial to halt the bearish slide.
Outlook
Experts project short-term volatility may persist as investors rebalance portfolios in response to rising interest rates and exchange rate instability. Yet, some optimists believe the market correction could create entry opportunities for long-term investors once stability returns.
“The fundamentals of several blue-chip stocks remain strong,” said Mrs. Lola Adebayo, Head of Research at Cordros Capital. “If government policy stabilizes the forex market and inflation tapers, the market will rebound — but the timeline remains uncertain.”
Bottom Line:
Thursday’s ₦4.64 trillion market loss stands as a stark reminder of the fragile state of investor confidence in Africa’s largest economy. Until Nigeria finds a sustainable balance between monetary tightening and growth stimulation, market volatility may continue to test the resilience of both local and foreign investors.
AWC News will continue to monitor developments on the Nigerian Exchange and broader fiscal responses from the federal government.
