Trump’s tariffs dampen investors’ appetite as Nigerian bourse records biggest drop in 4 weeks

The trade war sparked by the United States President, Donald Trump, is taking its toll on investment in the Nigerian stock market as losses persist.

While the  90-day pause on US tariffs offered some relief globally, it failed to spark a meaningful rally on the local bourse as the Nigerian equities market closed the week on a bearish note.

Profit-taking and portfolio rebalancing dominated trading as investors rotated out of high-flyers and re-entered defensive counters.

Investors continued to adopt a cautious stance amid an earnings season that has so far delivered little in the way of surprises.

The NGX All Share Index (ASI) declined by 0.90 percent week-on-week, settling at 104,563.34 points, its lowest level in

four weeks.

Despite ongoing dividend announcements and corporate disclosures, investor appetite remained subdued, suggesting

that market participants are more focused on macroeconomic signals than company-level news.

The market capitalisation also reflected the bearish mood, dipping by N440.51 billion or 0.67 percent  to close at N65.71 trillion.

Notably, this decline occurred despite the admission of 5.98billion additional shares of First HoldCo Plc to the NGX Daily Official List.

The market’s breadth was decisively negative, with just 27 gainers against 56 losers, translating to a negative

breadth ratio of 0.48x. This clearly shows the extent of the weakness, as sell-offs cut across most sectors.

However, the uptick in trading activity suggests that investors are still scanning for opportunities, with weekly volume and

value traded surging by 76.92 percent  and 83.48 percent  respectively to

2.09 billion units and N52.97 billion.

The number of deals also increased by over 52 percent, pointing to increased bargain hunting, especially in low-priced, high-beta stocks.

Across the board, sectoral performance was largely negative, reflecting risk-off sentiment. The NGX Insurance index led the losses, down 4.57 percent  as counters like ROYALEX, CORNERST, and

LASACO saw steep declines, erasing earlier gains from previous weeks. The Banking index followed closely, losing 2.20 percent  amid profit-booking in names like ACCESSCORP and ETI.

Meanwhile, the NGX Consumer Goods and Oil & Gas indices shed 0.61 percent  and 0.50 percent  respectively, pressured by declines in MAYBAKER, ETERNA, PZ, and OANDO. Even traditionally defensive sectors were not spared, with the Industrial and Commodity indices falling by 0.26 percent  and 0.10 percent  respectively, dragged by losses in UPDC, CUTIX, and ARADEL.

Despite the generally bearish tone, there were bright spots in the market. Stocks like VFD Group (+53.9%), UNION DICON

(+31%), ABBEYBDS (+29.6%), and FTN Cocoa (+18.8%) saw strong gains as investors chased speculative upside and played on momentum. On the flip side, ROYALEX (-20.8%), CORNERST (-15.2%), SOVRENINS (-15%), LASACO (-12.8%),

and CAP (-11.7%) closed the week as the worst performers, underscoring the selective nature of the selloff.

Looking ahead,  Analysts at Cowry Assets Management Limited noted that the short-term outlook for the market remains cautious. “All eyes are now on the March CPI data and the Q1 2025 macroeconomic report, which are expected to offer more clarity on the direction of the economy and set the tone for risk sentiment. The market is currently sitting in oversold territory, which may provide a technical basis for a short-term rebound.

However, sustained recovery will likely depend on improvements in economic indicators, policy clarity, and fresh triggers from corporate earnings. Until then, we expect continued sector rotation, with investors favouring value names and defensive plays

with strong fundamentals and resilient earnings power.

“For savvy investors, this dip could be a buying opportunity, particularly

in counters with robust dividend yields, solid balance sheets, and positive technical setups,” the Analysts hinted.