The Nigerian stock exchange experienced a significant recovery on Wednesday, increasing its total market value by about N2.6 trillion follow...
The Nigerian stock exchange experienced a significant recovery on Wednesday, increasing its total market value by about N2.6 trillion following a 2.89 percent rise, as explanations from important government figures regarding the new Capital Gains Tax (CGT) system boosted investor trust.
It is important to remember that the market experienced its biggest one-day drop in 15 years on Tuesday, losing N4.64 trillion in value within a single day. The market capitalization fell by N4.641 trillion, ending at N89.885 trillion, while the All-Share Index dropped by 7,454.6 points, or 5.01 per cent, finishing at 141,327.30 points.
Nevertheless, the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, restored investors' trust by offering clear insights into the rollout of the new CGT system via multiple statements and online posts. Oyedele highlighted that the CGT reform, set to begin in January 2026, aims to enhance Nigeria's capital market by ensuring equity and safeguarding investors, not deterring investment.
He eased concerns by confirming that profits made on shares prior to January 1, 2026, will be exempt—indicating that only gains acquired after this date will be subject to the new legislation. This temporary provision provides comfort to investors that there won't be any backdated taxation on previous earnings.
He mentioned that the new progressive CGT rates vary from 0% to 30%, based on income levels, replacing the previous flat 10% fee. This system provides exemptions for small investors and organizations like pension funds, Real Estate Investment Trusts (REITs), and NGOs, along with benefits for reinvesting within 12 months to achieve complete tax exemption. Oyedele emphasized that the reform is not focused on maximizing revenue but on creating a fair, investor-friendly environment to promote long-term growth and minimize investment risks.
Remember that the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, addressed investor worries regarding the CGT during the launch of the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund on Tuesday.
He pledged to stakeholders that the government is attentive, reviewing input, and dedicated to taking actions that maximize advantages for Nigeria.
Edun's commitment to a collaborative review process has been positively received by the market, aiding the recovery following significant losses due to concerns about the tax hike.
The government's decision to increase the CGT rate for foreign equity investors from 10% to three times that amount is considered a major contributor to the recent market fluctuations. Nevertheless, the promise that future reforms will be fair and take into account market conditions brings optimism for restoring stability and boosting continued involvement.
Demands for Equitable Reforms by Akwa Ibom Governor and Senate Committee Head
During the Moneyline Investment Forum in Abuja on Tuesday, Akwa Ibom State Governor, Pastor Umo Eno, and Senator Osita Izunaso, head of the Senate Committee on Capital Market and Institutions, highlighted the importance of executing fiscal and financial reforms with caution and equilibrium.
The Governor, through his Information Commissioner, stressed the need for government policies to reflect the people's interests, pointing out that reforms should result in real advantages for both individuals and companies.
He highlighted the significance of collaboration between fiscal reform and financial education to support long-term growth, using Akwa Ibom State's ARISE Agenda as a notable instance of subnational economic progress that aligns with national objectives.
Senator Izunaso voiced worries regarding the recent decline in the market due to the expected increase in CGT. He advocated for measures that tackle investor anxieties while ensuring government revenue goals are met without causing instability in the capital market. Izunaso reiterated the Senate's dedication to legislative changes, including the Investment and Securities Act (ISA) 2025, designed to boost market involvement, improve accessibility, and aid Nigeria's goal of achieving a $1 trillion economy by 2030.
Continuing, Qyedele mentioned that the reform enables investors to subtract valid expenses and capital losses, thus shielding them from being taxed on net losses. It also grants exemption to small investors and tax-free organizations like pension funds, real estate investment trusts, and NGOs from paying CGT.
Oyedele stated that although the flat 10 percent tax rate has been replaced by progressive rates varying from zero to 30 percent depending on income levels, the highest rate for major corporate investors is projected to drop to 25 percent as part of current corporate tax changes.
He mentioned that investors who reinvest their earnings within 12 months in Nigerian businesses would be eligible for complete relief, whereas small businesses with revenue under N100 million would still receive a 0% capital gains tax.
The policy is not focused on generating revenue," Oyedele stated, "but aims to establish a fair, competitive, and investor-friendly tax system that promotes long-term growth and boosts confidence in Nigeria's financial markets.
He mentioned that detailed instructions will be made available shortly to guarantee transparency, impartiality, and simplicity in following the rules for every investor.
In brief: The updated CGT framework enhances the tax system's fairness, brings it closer to international standards, and benefits long-term investors. It lowers investment risks, safeguards small investors, promotes reinvestment, and streamlines compliance while ensuring that major and high-income investors who decide to leave the market pay their appropriate share on realized gains that aren't reinvested," said the chairman of the Presidential committee.
In the meantime, Pastor Umo Eno, the Governor of Akwa Ibom State, and Senator Osita Izunaso, Chairperson of the Senate Committee on Capital Market and Institutions, have urged a cautious and well-considered approach to the current fiscal and financial reforms in order to maintain investor trust, promote broad-based growth, and reinforce the nation's economic base.
Both leaders spoke at the Moneyline Investment Forum in Abuja on Tuesday, which centered on Nigeria's changing financial environment, fiscal changes, and the path toward long-term economic growth.
The Information Commissioner stood in for the governor of Akwa Ibom State, Aniekan Umanah.
In the same way, Senator Izunaso voiced worries about the recent N4.64 trillion drop in market value observed on the Nigerian Stock Exchange, triggered by investors' response to the suggested 30 per cent capital gains tax under the Nigerian Tax Act 2025, set to come into force in January 2026.
He stated that the proposed rise from 10 to 30 percent on share transactions worth N150 million and more has led to extensive selling by key investors, causing a significant drop in market capitalization.
Before this change, we have noticed substantial sales by major investors, leading to a significant drop in market capitalization," he stated. "Although taxation is necessary for generating revenue, it is equally important that fiscal policies do not unintentionally harm investor confidence or deter long-term capital development.
Izunaso encouraged the Minister of Finance to examine methods that would tackle investor worries while maintaining government revenue goals without disrupting the capital market. "A balanced strategy will maintain momentum, safeguard market stability, and uphold the positive direction our capital markets have taken through current reforms," he said.
Governor Eno, who gave the main speech, emphasized that financial changes need to create a solid connection between government strategies and the public, stating that economic development will only be significant if these reforms result in tangible advantages for both individuals and companies.
"To attain lasting development, there needs to be collaboration among policy and the public, fiscal change and financial learning, and the executive suite and the market," he stated.
Although recognizing the importance of the current reforms—such as the new Investment and Securities Act 2025, Insurance Industry Reform Act 2025, updated tax regulations, and power sector liberalization—the governor warned that these changes need to be handled with care to prevent unexpected disruptions.
"We should remain aware of the dangers that come with change—such as market instability, inflationary forces, and worldwide uncertainties. However, these challenges also present chances to reshape leadership, encourage fair development, and use technology to enhance access to financial services," Eno said.
He mentioned that Akwa Ibom's economic approach, based on the ARISE Agenda, demonstrates how regional governments can boost efficiency, creativity, and business to support the Federal Government's goal of achieving a $1 trillion economy by 2030.
Akwa Ibom is now a testament to the fact that growth and development can be achieved when vision aligns with discipline, and when governance prioritizes the people over political convenience," he stated. Eno reasserted his dedication to transparency, accountability, and peace—calling them "the three key elements that draw in sustainable investment.
Izunaso also emphasized the Senate's dedication to enhancing market institutions via the Investment and Securities Act (ISA) 2025, calling it a groundbreaking legal structure aimed at increasing involvement and encouraging diversity in Nigeria's financial market.
The ISA 2025 is more than a legal document; it serves as a guide for creating a capital market that is inclusive, strong, and competitive on the global stage," Izunaso stated. "It backs the Federal Government's goal of reaching a $1 trillion economy by 2030 and turns our markets into drivers of widespread economic growth.
Both leaders highlight the importance of cooperation between government, regulators, and the private sector in turning reforms into real outcomes. They concur that Nigeria's future success relies on combining financial responsibility with investor trust—transforming policies into wealth and reforms into achievements.
The Nigerian stock market experienced a significant recovery yesterday, fueled by investors seeking opportunities in major company shares, as the total market value increased by N2.593 trillion, indicating renewed interest in purchasing.
The All-Share Index (ASI) rose by 4,076.53 points, reflecting an increase of 2.88 percent, ending at 145,403.83 points. Furthermore, the market capitalisation went up by N2.593 billion, closing at N92.478 trillion.
The recovery was fueled by increases in the value of large and mid-sized stocks, such as Aradel Holdings, MTN Nigeria Communications (MTNN), NASCON Allied Industries, Nigerian Aviation Handling Company (NAHCO), and Guaranty Trust Holding Company (GTCO).
Additionally, this pattern indicated increased institutional involvement via significant block trades, implying a calculated approach as investors take advantage of favorable entry points after the previous day's substantial decline.
Regarding market prospects, Afrinvest Limited stated, "We anticipate the exchange to maintain a positive closing due to trading activities as investors search for stocks with strong fundamentals during the temporary halt in controversial capital gains tax policy."
Market breadth showed a strong positive trend, with 65 stocks rising compared to 11 that fell. Access Bank, Ecobank Transnational Incorporated (ETI), GTCO, AXA Mansard Insurance, Nigerian Breweries, Oando, PZ Cussons Nigeria, Royal Exchange, Sovereign Trust Insurance, Wapic Insurance, and Zenith Bank were the top performers, each increasing by 10 per cent to close at N22.00, N34.65, N85.80, N13.31, N66.00, N39.60, N38.50, N1.87, N2.86, N2.86, and N59.40 per share, respectively.
NAHCO increased by 9.99 percent, ending at N96.90, whereas NASCON Allied Industries rose by 9.98 percent, closing at N103.60 per share.
On the flip side, Vitafoam Nigeria, Transcorp Power, and Austin Laz & Company topped the losers' list, each dropping by 10 per cent, ending at N84.60, N307.80, and N2.61 per share, respectively.
Red Star Express dropped by 9.80 percent, ending at N9.20, while Abbey Mortgage Bank fell 9.72 percent, closing at N6.50 per share.
The overall trading volume rose by 22.94 percent to 806.399 million units, with a value of N50.778 billion, conducted in 24,509 transactions. The most active shares were those of GTCO, with 104.780 million shares valued at N8.990 billion. Zenith Bank came next, with 86.806 million shares worth N5.156 billion, while Stanbic IBTC Holdings had 43.627 million shares valued at N4.580 billion.
Access Holdings saw 35.931 million shares exchanged valued at N789.581 million, whereas FCMB Group had 35.508 million shares traded worth N366.186 billion.
Copyright 2025 Leadership. All rights reserved. Distributed by AllAfrica Global Media (okay1)
Tagged: Nigeria, Economy, Business and Finance, West Africa
Provided by SyndiGate Media Inc. (Syndigate.info).
COMMENTS