Nigerian equities are in the red again as panic-driven sell-offs wipe out roughly N1.8 trillion in market value within just four trading sessions this month.
The NGX All-Share Index (ASI) slid for the fourth consecutive day, dropping from 154,123.62 points at last Friday’s close to 150,026.55 points by Thursday, trimming year-to-date gains from 49.74% to 45.76%.
According to investors who spoke to Nairametrics, the panic sell-offs are linked to the federal government’s proposed 25% capital gains tax set to take effect in January 2026, which will apply to profits above a N150 million threshold.
Local fund managers also point to profit-taking strategies and reallocation of funds into fixed-income markets as part of the reason behind the downturn.
Additionally, geopolitical tensions following U.S. President Donald Trump’s threat of military action against Nigeria are being cited as a potential driver of foreign investor exits.
Banking and consumer stocks lead the rout
The banking sector, which dominated value traded throughout the week, bore the heaviest losses.
ACCESSCORP, GTCO, ZENITHBANK, and ETI all recorded steep declines as large institutional investors pared down positions.
Despite mild resilience from UBA, FCMB, and WAPCO, overall sector sentiment stayed negative.
Consumer names such as DANGSUGAR, INTBREW, GUINNESS, and TRANSCORP also came under pressure, reflecting broader investor caution amid concerns about rising Q4 costs and slowing consumer demand.
Midweek weakness extended to MTNN and TRANSCORP, deepening the index’s 1.19% single-day plunge on Wednesday.
Market turnover stayed robust, with over 2.4 billion shares worth N77 billion changing hands across the week—a sign that investors are rotating rather than exiting completely.
Analysts describe the trend as a shift from high-beta equities to cash and defensives, as portfolio managers seek shelter from fiscal uncertainty ahead of the CGT rollout.
Capital gains tax jitters spook investors
Several investors who spoke with Nairametrics said the sustained sell-off stems largely from fear surrounding the new 25% capital gains tax (CGT) on share sales above N150 million, scheduled to take effect in January 2026.
Institutional investors, particularly high-net-worth traders and foreign funds, are taking profit now to avoid what they describe as a “potential 25% haircut” on future gains.
Local fund managers have warned that the law could prompt capital flight and a temporary pullback in liquidity if not reviewed, erasing the strong Q4 momentum that lifted October returns by over 8%, one of the year’s best months.
Profit-taking and macro headwinds
Analysts also attribute the downturn to aggressive profit-taking following October’s rally and to capital rotation into the fixed-income market, where yields remain attractive and recent auctions have been heavily oversubscribed.
Nigeria’s latest Eurobond issuance was reportedly 200% oversubscribed, underscoring renewed investor appetite for safer naira-denominated assets.
Adding to the unease, U.S. President Donald Trump’s threats of military action against Nigeria—in response to alleged human-rights violations—sparked speculative sell-offs by foreign investors worried about geopolitical risk.
What’s next
The market’s tone remains bearish heading into Friday’s session, with traders watching for cues from the fiscal authorities and possible clarifications on the implementation of the CGT rule.
If losses persist, November could mark the worst-performing month of 2025, reversing much of the optimism that followed the October rally.
The proposed 25% capital gains tax (on gains above N150 million) is expected to be implemented by January 2026, pending final legislative approval.
The CGT is not for profit of over N150m it is for profit over N10m or sale of asset worth over N150m. This is a retrogressive policy that will cause capital flight and should be repeled
One day we will be ask to pay tax on aiŕ we breathe