The record dip at the Nigerian stock market on Tuesday presents huge buy opportunity for both retail and institutional investors hunting for value to re-enter into the market.
The NGX All-Share Index (ASI) saw the highest daily dip in over a decade by 7,454.60 points or 5.01 percent as it closed at 141,327.3 points, its lowest level since mid-September. Also, investors lost about N4.64 trillion.
While some analysts blame the dip on President Donald Trump’s threat against Nigeria, others point to profit taking after weeks of strong gains as well as fears by institutional investors ahead of the capital gains tax (CGT) regime scheduled from January 2026.
Following the market’s now lows, analysts at Lagos-based Vetiva Research said in their post-trading note on Tuesday that, “Despite the deep losses observed today (Tuesday) and the expectation of further softness tomorrow (Wednesday), key signals suggest a temporary pause in the correction. Specifically, the high closing price of select names, such as MTNN, settling at N431.10 at the tail-end of intraday trading, points to immediate resilience”.
“Therefore, we anticipate that bargain hunting sentiment from both retail and institutional investors will likely emerge, leading to a marginal gain tomorrow (Wednesday) and temporarily halting the current market slide. Our tactical outlook is currently neutral-to-bearish,” the Vetiva Research analysts added.
Read also: Private Equity firms get CGT relief on Startups as other exits remain taxable
According to them, “The asset remains below the key resistance at 145,891.30 level, suggesting potential further consolidation or continuation of the downtrend (Neutral Scenario)”.
“The high-risk bearish scenario sees the asset in downside price discovery with no significant underlying support detected. Conversely, a confirmed break and hold above the 145,891.30 resistance, potentially coupled with rising volume, would support initiating new buys in the market,” Vetiva Research analysts added.
Meristem research analysts said in their recent note to investors that notable sell-offs among stocks that have experienced substantial gains will trigger intermittent fund outflows from the market.
“This trend could adversely affect overall liquidity, creating periods of increased volatility. Moreover, uncertainty surrounding the implementation of the Capital Gains Tax (CGT) poses additional risks.
“As institutional and foreign investors may face a significantly higher tax burden compared to retail investors, this disparity could lead to near-term sell-offs by these groups, exacerbating market instability,” Meristem research analysts further said.
At the close of trading on Tuesday, eleven major stocks, including MTN Nigeria, Dangote Cement, BUA Cement, Oando, and Transcorp, reached their daily floor limit of maximum of 10 percent.
The Exchange had already lost N2.83 trillion in the week ending October 31, a sign of growing investor unease. Only three stocks gained, while 65 declined, reflecting broad market capitulation.
