Trump turmoil: Stocks, Eurobonds sink deeper as naira pares losses

Nigerian stocks and Eurobonds extended their losses on Tuesday after United States President Donald Trump threatened to invade the country to eliminate terrorists allegedly killing Christians.

However, the naira recovered, rebounding from Monday’s decline.

Nigeria’s stock investors lost N612 billion loss on Tuesday following a N247 billion decline the previous day, bringing total losses in the two trading days this week to N859 billion.

The stock market fell by 0.72 percent, as it decreased by 0.97 percent, trimming the year-to-date (YtD) gain to 48.29 percent.

“The market remains in a stable bullish regime despite recent selling pressure. This pressure appears to be healthy profit-taking, an expected action during a bull run. That said, we cannot rule out the possibility of further downside in a large-cap stock that posted strong gains coming into this week,” Lagos-based Vetiva research analysts said in their November 3 post-trading note.

The stock market is seeing a major pullback in early trading this month after an eight percent record rally in October.

The Central Bank of Nigeria (CBN) will conduct its first treasury bills (T-bills) primary market auction (PMA) for the month on Wednesday, November 5, offering a total of N650 billion across the three tenors.

The offer ranges from N100 billion in 91-day bill, N100billion in 182-day bill, and N450billion in 364-day bill. They also have maturing bills worth N15.33 billion, N38.49billion, and N608.93billion across the respective tenors, which are expected to improve system liquidity.

Nigerian assets have fallen since this week, confirming investors’ fears that Trump’s threat could raise the risk premium on Nigerian assets, thereby eroding recent gains achieved by the nation’s reforms.

Reports indicate that President Bola Tinubu is close to completing the long-delayed appointment of ambassadors to Nigeria’s foreign missions, following months of complaints about the country’s limited diplomatic representation abroad.

The renewed push to formalise the appointments comes amid tension from Washington, following Trump’s recent threats of military action over disputed claims of Christian persecution in Nigeria.

At the Nigerian stock market, the NGX All-Share Index (ASI) and market capitalisation depreciated from Friday’s highs of 154,126.46 points and N97.829 trillion respectively to 152,629.6 points and N96.970 trillion. The market’s performance indices had closed Monday at 153,739.11 points and N97.582 trillion.

Read also: Naira recoups losses as market shrugs off Trump threat

Eurobond market continues to tumble

Also, Nigeria’s Eurobond market saw huge selloffs on Tuesday as investors fled after Trump threat.

The average yield on all 14 existing FGN Eurobond decreased by 11 basis points to 8.28 percent, from 8.17 percent on Monday.

Gbolahan Ologunro, portfolio manager at FBNQuest, said that the selloffs seen in the market were due to heightened political risk, general risk-off sentiments by international investors, and profit-taking.

Ologunro explained that Nigeria’s Eurobonds reacted synchronously with the U.S. stock market, stating that whenever there is bearish sentiment in that market, the dollar bonds usually move in the same direction.

The U.S. stocks dropped on Tuesday due to investors’ worry that company valuations were too high as firms reviewed the latest flurry of quarterly earnings.

The Nasdaq, which is heavy with tech companies, led the losses, falling about 0.9 percent. The broader S&P 500 dropped about 0.6 percent, while Dow Jones Industrial Average, which is less focused on tech, had the smallest dip, shedding 0.2 percent. All of them bounced back a little after bigger drops earlier in the day.

The selloffs seen, some of which analysts consider as profit-taking, came after weeks of bullish momentum in the dollar bonds market following the successful Trump- China trade agreement and the US rate cut by 25 basis points to 3.75 percent–4.00 percent last week.

“ In the interim, risk sentiment does not support raising fresh Eurobonds, although factors are still in favour of US borrowing at a lower rate than last year,” Ologunro further said.

Nigeria’s government plans to issue Eurobonds worth about $2.3 billion later this year to help finance part of its 2025 budget deficit.

The government expects the pricing of the Eurobonds to align with current yields on Nigeria’s existing international bonds, which range between 6.8 percent and 9.3 percent, depending on maturity.

According to Bloomberg, the average spread on Nigeria’s sovereign dollar bonds over US Treasuries had plunged to about 400 basis points as of Monday, from nearly 1,000 basis points in 2023, a level that investors typically consider as debt distress.

Read also: Stocks shed over N850bn in 2 days on Trump’s fears

Naira recoups losses

Meanwhile, the naira recovered from Monday’s losses as the foreign exchange (FX) market shrugged off the impact of remarks made by former U.S. President Donald Trump on Nigeria.

Data from the Central Bank of Nigeria (CBN) shows that the naira appreciated to N1,433.65 per dollar during intra-day trading, gaining 0.2 percent (N2.69) compared to N1,436.34 quoted the previous day at the Nigerian Foreign Exchange Market (NFEM).

An investment banker, who spoke with BusinessDay on condition of anonymity, said the market had calmed as initial fears over the possible implications of Trump’s remarks faded. “The market is stable today because traders now believe Trump’s comments are unlikely to translate into any immediate action that would affect Nigeria’s economy or its FX inflows,” the banker said.

The local currency maintained relative stability in the unofficial foreign exchange market, commonly known as the parallel or black market. Traders in major cities reported that the naira traded at similar levels to Monday, showing no significant volatility despite earlier external pressure.

Market checks across Lagos and Abuja confirmed that the dollar was sold at an average rate of N1,440 on Tuesday, the same as Monday’s rate. In some parts of Abuja, the naira even strengthened slightly, exchanging at N1,450 to the dollar, compared to N1,460 quoted the previous day in the black market.

Currency dealers attributed the stability to moderate dollar demand and improved liquidity from informal sources, which helped to cushion potential pressure arising from Trump’s comments. Nigeria’s external reserves, which provide the CBN with the capacity to support the naira, also remained steady growth, rising to $43.25 billion as of November 3, 2025, according to CBN data.

Meanwhile, Nigeria’s FX inflows through International Money Transfer Operators (IMTOs) have continued to weaken. Data from the CBN’s latest Quarterly Statistical Bulletin show that inflows through IMTOs fell by six percent quarter-on-quarter to $888 million in the first quarter of 2025.

A report by FBNQuest noted that this marks the second consecutive quarterly decline in IMTO inflows, with a year-on-year drop of 18 percent. The report observed that, apart from the recent quarters, inflows through IMTOs had rebounded strongly since the fourth quarter of 2023 following CBN reforms aimed at improving transparency, pricing efficiency, and regulatory oversight in the FX market. Consequently, formal diaspora remittances through IMTO channels rose to nearly $4.8 billion in 2024, up from about $3.3 billion in 2023.

However, in the first quarter of 2025, the surplus in the current transfers component of Nigeria’s current account fell by 18 percent quarter-on-quarter to $5.3 billion, partly due to a four percent drop in diaspora remittances. Analysts attribute this decline to increased use of informal and cryptocurrency channels for cross-border transfers.