December 14, (THEWILL) — The Nigerian capital market has experienced a dramatic 2025, marked first by a meteoric rise in equity values, then a sharp, confidence-shattering panic, and finally, a commitment to far-reaching reforms aimed at a more stable and transparent future.
The Bullish Run (January – September 2025)
The year began with a strong, sustained bullish run that positioned the Nigerian Exchange (NGX) as one of Africa’s top-performing markets. Driven by positive investor sentiment, increased foreign inflows, banking sector recapitalization expectations, and robust corporate earnings. The All-Share Index (ASI) and market capitalization breached historic milestones.
January: The ASI gained 1.52%, closing at 104,496.12 points. Market capitalization was approximately N64.709 trillion.
February: The market added another 3.18%, with the ASI reaching 107,821.39 points and market capitalization rising to N67.193 trillion.
March: A brief correction led to a monthly loss of approximately -2.00%, but the market still closed the first quarter at an ASI of 105,660.64 points and an equities market capitalization of N66.257 trillion.
April: The upward trajectory resumed, with the ASI closing at 105,800.85 points and a market capitalization of N66.496 trillion.
May: The ASI rose by 5.6%, closing at 111,742.01 points, and market capitalization hit N70.662 trillion at the end of May.
June: The strong performance continued, closing the month with a 7.38% gain in the ASI, settling at 119,978.57 points on the last trading day. The equities market capitalization at the end of June was approximately N75.95 trillion.
July: This was the strongest month, with a massive 17.03% gain in the ASI, which closed at an all-time high of 139,863.67 points. The equities market capitalization at the end of July was N88.425 trillion.
August: Momentum slowed slightly but remained positive, with the ASI gaining a modest 0.31% to close at 140,295.5 points. The equities market capitalization reached approximately N92.73 trillion as of early August, with some subsequent pullback during the month.
September: The market continued its positive movement, gaining 1.72% for the month to close the ASI at 142,710.48 points and equities market capitalization at N90.58 trillion (equities only) or N140.6 trillion (total market capitalisation).
The overall year-to-date return as of the end of September was a phenomenal 36.81%, a testament to strong investor confidence and favourable economic conditions.
The October & November Panic
The bullish run came to an abrupt halt in October and November, when the market was hit by significant selling pressure and panic sales.
This downturn was largely triggered by widespread investor apprehension and confusion over the implementation of a potential 30% Capital Gains Tax (CGT) on share transactions above a certain threshold (N150 million), slated to take effect from January 1, 2026.
October: The market still managed a strong monthly gain of 8.00% on the ASI, closing at 154,126.46 points, and a market capitalization of N97.829 trillion. However, the uncertainty was building, with mixed investor sentiment and increasing volatility towards the end of the month.
November: The panic materialized into a historic rout. The Nigerian equities market experienced its steepest monthly percentage decline since October 2022.
The ASI plunged by 6.88% (10,605.93 basis points) to settle at 143,520.53 points at the end of November.
The market capitalization shed a staggering N6.54 trillion in value, contracting by 6.69% month-on-month to close the month at N91.29 trillion.
This “complete bloodbath” in value was a direct result of investors aggressively taking profits and exiting positions to avoid the looming tax, highlighting the market’s acute sensitivity to fiscal policy risks.
Clarifications from the Minister of Finance mid-November that the government would adopt a cautious and consultative approach, “grandfathering” gains earned before December 31, 2025, and exempting small and institutional investors, helped the market stage a partial rebound but did not fully stem the tide of the November losses.
Enter ISA 2025
In response to market dynamics and a commitment to aligning with global best practices, the Investments and Securities Act (ISA) 2025 was enacted in March 2025, and its full implementation has become a focal point of regulatory response to the November panic. This landmark legislation replaces the 2007 framework and introduces comprehensive reforms designed to modernize the capital market architecture and restore investor confidence.
The ISA 2025’s promises for the future include:
Enhanced Regulatory Powers: The Act grants the Securities and Exchange Commission (SEC) strengthened authority to manage systemic risks, conduct on-site inspections, and impose stiffer penalties for non-compliance, including explicitly banning Ponzi and pyramid schemes with heavy fines and imprisonment.
Modernisation and New Assets: The Act formally recognizes and provides a legal framework for digital assets (like cryptocurrencies) and commodities exchanges, unlocking new capital pathways and diversifying investment options for investors.
Investor Protection: The ISA 2025 introduces new provisions for investor compensation through an enhanced Investor Protection Fund (IPF) and mandates the use of Legal Entity Identifiers (LEIs) for transparency and accountability in all transactions.
Market Efficiency: The Nigerian capital market formally transitioned to a T+2 settlement cycle in November 2025, a significant shift aimed at improving market efficiency and reducing risk.
Access to Capital: The Act provides an avenue for startups, SMEs, and state/local governments to raise capital through the market, promoting broader economic growth.
The strategic, disciplined, and collaborative implementation of the ISA 2025 is considered by experts to be the bedrock upon which Nigeria’s ambition of achieving a $1 trillion economy by 2030 will be realised.
By serving as the primary engine for mobilizing long-term finance across critical sectors like infrastructure, housing, and manufacturing, the capital market, empowered by the ISA, can attract the necessary domestic and foreign private capital to drive the required economic growth.
Recognition of digital assets, for instance, is seen as a key way to engage Nigeria’s young, digitally-native population, contributing to financial inclusion and economic expansion. The success of this ambitious national goal now hinges on the seamless and effective execution of these crucial reforms.
Ogochukwu Onwaeze
