### Rewritten Article:
**CBN’s Foreign Subsidiary Rule Sparks N1.92 Trillion Loss on NGX**
By Taiye Olayemi
Lagos, May 7, 2026 (NAN) – The Nigerian Stock Exchange (NGX) ended Thursday’s session in the red, with investors losing a total of N1.92 trillion amid sell-offs in banking and cement stocks. This decline came in reaction to the Central Bank of Nigeria’s (CBN) new regulatory guidelines on foreign subsidiaries of Nigerian banks.
The market capitalization fell from N155.780 trillion to N153.858 trillion, marking a decline of 1.23 per cent, or N1.92 trillion. The All-Share Index (ASI) also dipped by 1.23 per cent, shedding 2,994.90 points to close at 239,734.61 from its previous position of 242,729.51.
The Year-to-Date (YTD) return moderated to 54.82 per cent.
Explaining the cause of the drop, Tajudeen Olayinka, an investment banker and stockbroker, attributed the losses to the market’s reaction to the CBN’s new directive. He explained that the CBN’s regulation requires banks with foreign operations to limit their investments in foreign subsidiaries to just 10 per cent of their equity capital or shareholders’ funds.
Olayinka further stated that the CBN also instructed banks that have exceeded this limit to start divesting from their foreign subsidiaries. He noted that the market’s immediate reaction was to interpret this move as the CBN integrating the revenues and reserves of banks with foreign operations into their existing regulatory capital. This, he argued, would reduce banks’ ability to pay out dividends or make future payouts reliant on their growth trajectories.
He explained that the directive led to the heavy repricing of international banking stocks, which in turn caused a ripple effect, bringing down the prices of other major equities, particularly cement companies.
However, Olayinka described the impact as temporary, noting that the affected banks remain well-capitalized and largely undervalued. He encouraged investors to hold onto their banking stocks, stating that the sector’s fundamentals remain strong, and the industry is highly regulated with no liquidity concerns.
Despite the overall decline, the market breadth closed positive, with 42 gainers against 30 losers. CAP and FTN Cocoa Processors led the gainers’ list, both surging by 9.99 per cent, closing at N212.50 and N8.04 per share, respectively.
On the flip side, Berger Paints, Zichis Agro Allied Industries, and Meyer experienced the largest losses, each dropping by 9.97 per cent, closing at N98.75, N30.33, and N17.10 per share, respectively.
University Press led the losers’ chart with a 10 per cent drop, finishing at N4.50, followed by Red Star Express, which fell by 9.59 per cent to N25.45. Skyway Aviation Handling Company also saw a decline of 8.63 per cent, closing at N130.75.
Market activity saw an uptick, with total traded volume rising by 29.34 per cent to 1.83 billion shares, valued at N72.17 billion, exchanged in 81,131 deals.
NEM Insurance recorded the highest traded volume, with 360.56 million shares, representing 19.70 per cent of the total volume. Seplat Energy led in value terms with N12.98 billion in transactions, accounting for 17.99 per cent of the total value traded.
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### Meta Description:
The Nigerian Stock Exchange (NGX) lost N1.92 trillion after sell-offs in banking and cement stocks, triggered by new regulatory guidelines from the Central Bank of Nigeria (CBN) on foreign subsidiaries. This market decline reflects investors’ reactio
n to the changes affecting Nigerian banks’ operations abroad.
