The Nigerian Exchange (NGX) All-Share Index (ASI), which has enjoyed a remarkable rally this year thanks to economic reforms and strong corporate earnings, is showing signs of cooling. After reaching record highs earlier in 2025, the market has lost over N7 trillion in value this month, signaling that the earlier bull run may be losing steam.
On Tuesday, the ASI slipped 0.12% to close at 144,986.51 points, pushing year-to-date returns down to 41% and trimming market capitalization by N110.20 billion to N92.2 trillion. Heavy sell-offs in blue-chip stocks such as Zenith Bank, PZ, UBA, and Access Bank were the primary drivers of the decline, while gains in stocks like NCR and high-volume trading in Tantalizer provided some relief. Analysts attribute this pullback to a mix of profit-taking and market overstretching.
Proposed changes to Nigeria’s Capital Gains Tax (CGT), which could see rates triple to 25–30% on gains above N150 million starting January 2026, triggered panic selling. The ASI experienced a steep 5.01% drop on November 11, marking its worst single-session decline since 2010. Market sentiment stabilized partially after Finance Minister Wale Edun assured consultations and potential exemptions for foreign investors, helping to slow further sell-offs.
External factors, including interest rate fluctuations, naira volatility, rising inflation (16.05% in October), and US political threats regarding Nigeria, have added to investor caution. Frontier market funds and foreign portfolio investors (FPIs) began exiting positions, while year-end portfolio rebalancing intensified pressure on large-cap stocks like Dangote Cement and MTN Nigeria.
Despite short-term turbulence, analysts remain cautiously optimistic. Forecasts suggest the ASI could return to 150,000 points by the end of 2026, supported by potential policy clarity and Nigeria’s projected non-oil GDP growth of 3.6–4%. Sectors like banking and insurance, currently undervalued, may offer investors profit opportunities, highlighting that careful diversification remains key to navigating ongoing global and domestic challenges.
source: nairametrics