In this episode of Follow the Money, host Ugodre breaks down why the Nigerian stock market suffered a loss of over N2 trillion in one week.
The show opens with Ugodre noting that the market kept falling, as the All Share Index dropped 2.3 percent for the week and brought the month-to-date loss to 6.7 percent, adding that, by the end of November, N4.78 trillion had been wiped out, which he described as a“really bloody” time for the equities market.
According to him, several factors led to the sell-off, with the Capital Gains Tax being a major reason which tends to unsettle investors and keeps many from joining the market.
However, he pointed out that major investors have shifted their funds into fixed income securities, driven by the belief that current yields may be the highest available for a while.
Additionally, he highlighted that rising regulatory costs are weighing heavily on banks, with institutions paying significant portions of their profits to regulators, including mandatory contributions to the Asset Management Corporation of Nigeria (AMCON).
Moreover, he believes the downturn presents a strategic opportunity for investors and views the market’s behavior as short-term turbulence that will correct itself once investor confidence returns.
Watch the latest episode of Follow the Money with Ugodre to get the full breakdown and market outlook.
