NGX Weekly Wrap: ₦3.8tn Vanishes as Geregu Bond Default and ₦456bn Kaduna Disco Debt Crisis Rattle Investors

The Nigerian Exchange (NGX) had a volatile week, alternating between record highs and steep sell-offs. The index opened at a record high (up N1.91tn) and posted a broader N10.9tn corporate-earnings-driven rebound, but repeated profit-taking sessions wiped out gains, losses of N3.8tn, N2.93tn, N1.17tn, N1tn and N613bn were recorded across different sessions, with banking, consumer goods (Unilever) and BUA Foods stocks among the hardest hit. Weekly trading volume still surged 127% to N176.06bn, and the index touched a weekly high of 245,573 points on a banking rally, indicating high investor activity despite the swings.

The naira also moved unevenly through the week, depreciating mid-week before recovering to close at N1,364.89/$ on August 14, supported by external reserves rising above $52bn.

On the credit side, Geregu Power (controlled by Yari) defaulted on a N40bn bond payment, the first Nigerian corporate bond default in seven years, raising questions about credit assessment standards and prompting analyst commentary on risks in the power sector. Separately, regulator NERC dissolved Kaduna Disco's board over N456bn in debt and is seeking a new investor, a signal of deepening financial distress among power distribution companies.

On policy, President Tinubu signed a tax remission order for deep offshore oil projects and unveiled a framework aimed at unlocking $50bn in offshore investment, a potential positive for oil and gas majors including NNPCL. Corporate earnings were mixed but generally constructive: OPay swung to profit in FY2025 with revenue up 161% to $536.3m ahead of a US IPO; Jumia's shares jumped 10.6% after revenue rose to $52m and it secured $50m in fresh capital; Dangote Sugar raised N485.9bn via an oversubscribed rights issue.

Investors should watch: Kaduna Disco's investor search and NERC's next steps, further disclosure on Geregu's default and its read-across to other power-sector bonds, naira trading trends against reserve levels, and the pace of implementation of the new offshore oil tax incentives.