The Nigerian stock market staged a remarkable recovery on Wednesday, posting a N2.6 trillion gain in market capitalisation just a day after suffering a historic N4.6 trillion loss. The bounce-back underscores the resilience of local investors and highlights the market’s sensitivity to policy developments.
Market optimism was sparked by comments from the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, who assured investors that the government would adopt a cautious, consultative approach in implementing the recently enacted tax reforms. The minister’s clarification specifically addressed concerns over the contentious capital gains tax (CGT) on securities transactions.
Investor sentiment responded strongly to the government’s reassurances, driving the market capitalisation up by 2.9% to close at N93.5 trillion, up from N90.833 trillion the previous day. Similarly, the benchmark All Share Index gained 2.9%, finishing at 145,405.39 points, compared with 141,327.30 points on Tuesday.
Analysts say the recovery reflects renewed confidence in the Nigerian stock market, emphasizing that clear and measured communication from policymakers can help stabilise trading sentiment. “Investors are looking for consistency and transparency,” one market expert noted, “and Edun’s statement provided much-needed reassurance.”
Despite the rally, experts caution that the market remains sensitive to policy shifts, especially around taxation and regulatory reforms. However, the swift rebound demonstrates the market’s ability to absorb shocks and recover when investors regain confidence, suggesting a cautiously optimistic outlook for the remainder of the trading week.
source: The Sun