This month, Nigeria’s economic and financial landscape was defined by the Central Bank’s efforts to stimulate growth and the market’s cautious response. The Central Bank of Nigeria (CBN) executed a clear two-step strategy: first, it cut the Monetary Policy Rate (MPR) in September, making borrowing cheaper for the first time since 2020. Then, in November, it made parking cash with the CBN less attractive for banks. The goal was straightforward: to push banks to lend more to businesses and individuals.
The impact was immediate and significant. Private-sector credit surged by ₦1.88 trillion in October, marking the strongest monthly expansion in 2025. However, this surge follows a period of contraction, and year-on-year growth remains modest at just 0.5%. This suggests the policy is providing a crucial boost, but a sustained recovery is still taking shape.
Equities Market & Portfolio Performance
The broader stock market faced significant headwinds, with the NGX All-Share Index falling 6.88% last month. This decline was driven by widespread profit-taking, partly triggered by concerns over newly introduced capital gains tax provisions.
Sector Performance Breakdown:
- 📉 Biggest Losers: The Banking sector was the main drag, led by declines in ACCESSCORP (-14.11%), ZENITHBANK (-4.76%), and GTCO (-3.46%). DANGCEM in the Industrial Goods sector fell sharply by 19.00% as investors took profits.
- ✅ Relative Bright Spot: The Tier-2 bank FCMB provided a cushion, gaining +0.47%.
- ➡️ Muted Impact: Losses in Oil & Gas, Agriculture, and Telecommunications (e.g., MTNN at -9.52%) had a smaller overall effect due to their lower portfolio weights.
Fixed Income Market Dynamics
Meanwhile, conditions in the fixed income market were shaped by ample system liquidity. Liquidity remained elevated, supported in part by a significant ₦773 billion OMO maturity.
- Central Bank Role: The CBN is expected to intervene to absorb some of this excess cash to manage inflation, likely by selling its own securities.
- Investor Activity: This environment is creating stable rates, prompting investors to rearrange their portfolios and lock in yields ahead of the new year.
Outlook for the Coming Week
- Equities: The market is likely to trade sideways in the absence of major positive catalysts, reflecting a cautious "wait-and-see" sentiment.
- Fixed Income: High system liquidity is expected to sustain buying interest in government securities, though the CBN's liquidity management operations will temper activity.
The Bottom Line
The CBN’s proactive measures are successfully channeling liquidity toward private-sector growth, providing a vital economic boost. However, investor sentiment in equities remains cautious, rewarding defensive portfolio strategies. While stocks may lack direction in the short term, the fixed-income market continues to offer selective opportunities driven by robust liquidity and central bank activity. For expert insights and timely updates across the Equities Market, subscribe to Vetiva Research and stay ahead with in-depth market reports.
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