Nigeria Stock Market Slowdown Linked to New T+1 Settlement Cycle as Foreign Investors Pull Back
Nigeria’s stock market is experiencing a noticeable slowdown just days after the launch of its new T+1 settlement cycle, with experts suggesting that the policy shift may have unsettled foreign investors and triggered a temporary pullback in trading activity. The change, which took effect on June 1, 2026, shortens the settlement period for securities transactions from two days to one, aiming to modernize the market and align it with global standards.
The Nigerian Exchange (NGX) transition to T+1 coincided with a sharp drop in trading volumes and a wave of selloffs, raising concerns among market participants. Analysts say foreign investors, who play a significant role in market liquidity, are currently staying on the sidelines as they assess how the new system affects their operations and capital flows.
Speaking on the Drinks and Mics podcast hosted by Nairametrics founder Ugo Obi-Chukwu, investment experts explained that while the reform improves efficiency, it also introduces new operational pressure. Chief Investment Officer at Zrosk Investment Management Ltd, Samson Esemuede, noted that the tighter settlement timeline requires investors to have cash readily available within a day, increasing funding pressure—especially for international traders dealing with multiple custodians and foreign exchange layers.
He further explained that foreign investors face additional challenges due to Nigeria’s evolving FX market, which lacks sufficient hedging instruments to cushion currency risks. According to him, this makes pre-funding naira positions more complicated and expensive, prompting some global investors to pause trading until clearer systems emerge. Other market operators, including Dele Akintola of Alerzo and Renaissance Capital’s Arnold Dublin-Green, confirmed that trading volumes have already shown double-digit declines since the rollout.
While the T+1 settlement cycle is designed to improve liquidity, speed up access to cash, and strengthen Nigeria’s capital market competitiveness, experts believe the short-term reaction reflects adjustment pains rather than long-term decline. The coming weeks will be critical in determining whether foreign investors return or remain cautious as the market adapts to its fastest settlement framework yet.
source: nairametrics