Nigeria’s equities market is poised to deliver a robust 45.9 per cent return by the end of 2026, supported by sustained economic reforms, improved macroeconomic stability, stronger corporate earnings and a pipeline of major capital market developments, despite lingering global geopolitical and domestic economic risks.
This was the consensus of analysts at Arthur Steven Asset Management Limited (ASAM) and capital market experts during the firm’s Mid-Year Macroeconomic Review and Investment Outlook for H2 2026 webinar, where they expressed optimism that Nigeria’s investment landscape remains attractive following one of the strongest first-half performances in the country’s history.
According to the analysts, the Nigerian Exchange (NGX) recorded a remarkable 47.43 per cent year-to-date gain in the first half of 2026, creating approximately N47tn in investor wealth as the All-Share Index climbed to about 229,419 points at the end of June after briefly surpassing the historic 250,000-point mark in May.
They attributed the rally to improved investor confidence following the successful implementation of key economic reforms, including banking sector recapitalisation, foreign exchange market reforms, improved external reserves, easing inflationary pressures earlier in the year, and increased participation by domestic institutional investors.
The analysts noted that although the market witnessed profit-taking in June, resulting in a correction, the decline reflected a healthy repricing rather than a reversal of the broader bullish trend.
Presenting the macroeconomic outlook, first Professor of Capital Markets, Uche Uwaleke said Nigeria has entered the second half of the year from a stronger economic position than anticipated, citing improved foreign exchange stability, rising external reserves and resilient economic growth despite global uncertainties.
He explained that the country’s external reserves have climbed above $51bn, representing the highest level in about 13 years, while the naira has stabilised within the N1,350 to N1,450 per dollar range after experiencing severe volatility over the past two years.
According to him, the narrowing gap between the official and parallel foreign exchange markets has significantly improved investor confidence and reduced uncertainty across the economy.
He, however, warned that inflation remains a key concern following renewed upward pressure triggered by geopolitical tensions in the Middle East, particularly the conflict involving the United States, Israel and Iran, which pushed global crude oil prices above $100 per barrel.
Headline inflation, which had declined consistently to about 15.06 per cent in February 2026, rose to 15.93 per cent by May, driven mainly by higher transportation costs and food prices.
Despite these challenges, the analysts maintained that Nigeria’s macroeconomic fundamentals remain considerably stronger than they were a year ago.
They pointed to the successful completion of the Central Bank of Nigeria’s banking recapitalisation programme, under which 33 of the country’s 36 licensed banks met new capital requirements after collectively raising about N4.65tn, describing the exercise as the largest capital mobilisation programme in Nigeria’s financial history.
They also highlighted the implementation of the T+1 settlement cycle, revised capital requirements for capital market operators and the Investments and Securities Act (ISA) 2025 as reforms that have significantly strengthened the integrity, efficiency and competitiveness of Nigeria’s capital market.
The analysts observed that the Nigerian market continues to attract strong foreign investor interest, with capital importation rising sharply during the first quarter of 2026 to over $10.3bn.
However, they cautioned that nearly 95 per cent of these inflows were portfolio investments rather than foreign direct investment, making the economy vulnerable to sudden reversals should global market sentiment deteriorate.
Looking ahead to the second half of the year, Managing Director of ASAM, Mr. Tunde Amolegbe projected continued strength in equities, supported by expectations of stable monetary policy, resilient corporate earnings, improved foreign exchange liquidity and anticipated landmark listings, particularly the proposed listing of the Dangote Refinery, which could become one of the largest listings in Africa.
The firm said sectors expected to outperform include banking, oil and gas, industrial goods and telecommunications, while insurance stocks may continue to lag pending the completion of industry recapitalisation.
The report also retained a constructive outlook on the fixed-income market, noting that Treasury bills and Federal Government bonds would continue to attract investors because of relatively high yields and stable macroeconomic conditions.
ASAM recommended that investors maintain diversified portfolios comprising 50 per cent equities, 20 per cent fixed income, 20 per cent alternative investments and 10 per cent dollar-denominated assets and cash, arguing that such positioning would provide the right balance between growth opportunities and risk management.
Nevertheless, the analysts warned that downside risks remain significant.
Among the key risks identified are renewed naira volatility, escalating geopolitical conflicts, reversal of foreign portfolio inflows, rising inflation, pre-election fiscal spending ahead of the 2027 general elections and persistent insecurity affecting agricultural production.
They stressed that while these risks could trigger increased market volatility, Nigeria’s improving macroeconomic fundamentals and ongoing structural reforms provide a solid foundation for sustained investment growth.
The analysts concluded that the country’s capital market has moved beyond a momentum-driven rally into one increasingly supported by stronger earnings, improved corporate fundamentals and policy reforms, expressing confidence that if reform momentum is sustained, Nigeria remains well-positioned to deliver attractive returns to investors throughout the second half of 2026.
