Follow Us on Google
…Investors jittery over Trump’s invasion threat
By Chinwendu Obienyi
Nigeria’s equities extended their losing streak for a fourth straight session Thursday, deepening a selloff that has wiped more than N2.5 trillion from market value as investors react to renewed political risk concerns and unwind positions built during October’s rally.
According to data obtained from the Nigerian Exchange Limited (NGX)’s website, its All-Share Index (ASI) fell 0.36 per cent, its sharpest daily decline this month, dragging the benchmark to 150,026.55 points from this week’s opening figure of 154,126.46 points.
Furthermore, total market capitalisation or total value of listed securities on the NGX slipped to N95.3 trillion, down from N97.8 trillion on Monday.
The downturn, driven largely by profit-taking in blue-chip stocks, has been amplified by global risk sentiment after U.S. President Donald Trump threatened military intervention in Nigeria over reported attacks on Christians.
The comments, made over the weekend, rattled domestic traders and foreign portfolio managers who fear heightened geopolitical uncertainty could inflate the risk premium on Nigerian assets, reversing recent gains spurred by government reforms.
Commenting on the development, market operators noted that the market was due for a correction before Trump’s comment sparked sell-offs.
Chief Executive Officer, Crane Securities, Mike Eze, said, “This market was already due for a correction after the strong run in October, but Trump’s comments accelerated the sell-off. Foreign investors were just beginning to show interest again. Any perception of instability sends them straight back to the sidelines.”
The exchange had surged 8 per cent in October, its best monthly performance this year, pushing the year-to-date return to 46.52 per cent. But that figure has now dropped to 45.76 per cent, according to NGX data.
Traders say the pullback is driven not just by global headlines but by strategic repositioning. Many fund managers are locking in profits in banking, consumer goods, and industrial names that have rallied sharply in recent months on the back of monetary tightening and improving earnings.
“After an extended rally, the market has become very sensitive to any negative information. Investors are reducing exposure to equities until the political noise settles. Some are moving temporarily into cash or short-term fixed income”, Eze added.
The broader macroeconomic environment also remains fragile. Nigeria has been battling a weakened currency, elevated inflation, and volatile foreign exchange liquidity, factors that have complicated valuation models for equity traders.
Worse still, the naira may be primed to end the week in a loss position, after the official FX rate depreciated by 0.8 per cent to settle at N1,442/$1.
Analysts warn that any additional geopolitical shock could trigger more volatility in the weeks ahead.
While the scope of Trump’s threat remains unclear, market operators say the psychological impact is measurable. Research Head at Green bank Securities, Raina Sule, said, “Even if the probability of an actual intervention is near zero, the mere mention raises the specter of diplomatic strain and reduces investor confidence. Markets dislike uncertainty, and this is a new variable investors didn’t price in.”
Eze argues that the dip could offer selective buying opportunities for patient investors. Corporate earnings remain robust, and the government continues to push through reforms aimed at stabilizing the business environment.
“We expect short-term turbulence, but the fundamentals of top-tier Nigerian companies remain strong. Long-term investors will see value once the political dust settles”, he said.
For now, all eyes remain on policy responses and global political developments that could either calm or further unsettle Africa’s largest equities market.
