Capital Gains Tax: Equities Investors Lose N1.5trn to Panic Selloffs

The Nigerian Exchange (NGX) market capitalisation lost N1.5 trillion week on week as the new capital gains tax stoked panic selloffs in the local bourse.

The stock market extended its bearish stretch last week, closing at 147,013.59 points, down 1.68% week-on-week, as investors continued to price in the potential repercussions of the proposed 2026 capital gains tax on portfolio valuations.

Uncertainty triggered widespread panic on Tuesday, culminating in a historic single-session decline of 5.01% which was more than N4.6 trillion, the steepest daily loss in several years.

Sentiment, however, stabilised after the Federal Government hinted at a possible review of the tax proposal, helping the market record its first positive close for November midweek as bargain hunters and institutional players cautiously re-entered the market.

Hence, market capitalisation dipped by N1.50 trillion to N93.50 trillion, moderating the NGX All-Share Index’s year-to-date return to 42.83%, still one of the best in Africa, Cowry Asset told investors in a note.

The investment firm said market breadth printed at 1.07x, with 48 gainers against 45 decliners, indicating that pockets of resilience persisted despite the broader downturn.

Trading activity delivered a mixed picture as the total number of deals fell by 7.60%, yet traded volume and value surged 104.87% and 46.17% to 7.32 billion units and N156 billion, respectively.

The trading pattern reflects increased institutional block trades amid muted retail participation.

Sector performance leaned positive: Insurance (+2.42%) led the advance on renewed speculative and value-driven interest, while Banking (+1.26%), Consumer Goods (+0.46%), and Oil & Gas (+0.01%) also closed higher.

Conversely, the Industrial Goods sector (-6.97%) experienced a heavy pullback due to sustained selloffs in major counters, while the Commodity Index (-2.02%) reflected broad-based profit-taking.

Top performers for the week included NCR (+32.3%), ASOSAVINGS (+14.4%), CHAMPION (+11.5%), INTENEGINS (+11.5%), and NSLTECH (+10.7%), buoyed by solid buying interest.

On the flip side, UNIONDICON (-18.7%), AUSTINLAZ (-18.6%), MULTIVERSE (-14.5%), ACADEMY (-10.0%), and DANGCEM (-10.0%) recorded the sharpest losses, weighed down by elevated profit-taking and weakening investor sentiment.

With sector leadership rotating rapidly, liquidity shifting toward institutional blocks, and technical indicators flashing overextended conditions, the market sits at an inflection point.

Although the market index remains up 42.58% year to date, the underlying tone is cautious, and near-term direction will depend on whether the current rotation broadens or fizzles out.

Heading into next week, Cowry Asset expects tempered activity as investors weigh year-end profit-taking against evolving macro cues.

Cowry Asset said key catalysts include the October 2025 inflation print and the November MPC decision, both of which will shape expectations around interest rates, liquidity conditions, and equity risk premium.

While macro stability and improved sentiment offer a layer of support, momentum is likely to stay soft with a mild bearish bias—unless a significant upside trigger restores conviction across the board, the investment firm told investors in a report.