Nigerian financial markets opened the first week of November in red, as investors initiated a sell-off across equities, currency, and fixed income segments following an unprecedented threat of military intervention from the United States (U.S.) President Donald Trump.
The President’s statement, issued over the weekend, designating Nigeria a “Country of Particular Concern” over alleged religious persecution and threatening potential military action or aid suspension – if Nigerian Government fails to stop the alleged killing of Christians. This statement injected severe geopolitical risk into Nigerian assets, triggering sharp declines on Monday and continued volatility through Tuesday.
Nigerian president Bola Ahmed Tinubu has refuted the claims made by president Trump stating that “Nigeria opposes religious persecution and does not encourage it”. He added that Christians are not being targeted in the country.
The equities market bore the brunt of the immediate investor panic, translating directly into wealth erosion.
On Monday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) tumbled by 0.25 percent, closing at 153,739.11 points, down from Friday’s close. This single-day decline wiped out an estimated N247 billion in market capitalization, bringing the total market value down to N97.58 trillion.
On Tuesday, the index shed another 0.72% to settle at 152,629.6 points – down from 153,739.1 points on Monday.
Total trading volume dropped by a staggering 88 percent, indicating that investors were reluctant to participate, either by purchasing perceived cheap assets or liquidating positions at depressed prices. Notable losses were recorded in major blue-chip stocks, including Aradel Holdings (-9.21%) and Access Corporation (-3.07%).
The foreign exchange market experienced immediate pressure as portfolio investors sought to convert local currency assets back into the U.S. dollar, exacerbating existing liquidity concerns.
Data from the Central Bank of Nigeria (CBN) for the official Nigerian Foreign Exchange Market (NFEM) showed the Naira depreciated by 1.03 percent on Monday. The local currency closed at N1,436.34/$, losing N14.61 against the dollar compared to its closing rate of N1,421.73/$ on Friday.
The country’s foreign debt market, represented by the Federal Government of Nigeria (FGN) Eurobonds, saw ” selloffs” as investors repriced the nation’s risk.
The average yield on the 14 outstanding FGN Eurobonds saw upward pressure following the threat on Monday. While data on Tuesday indicated a possible attempt at stabilization, with the average yield noted to have fallen slightly from 8.28 percent to 8.17 percent, the overarching sentiment remains bearish due to the elevated political risk.
Analysts note that this high-risk environment could complicate Nigeria’s recent plans to refinance its maturing debt obligations, including the $1.1 billion Eurobond due in November 2025.
