Nigeria’s capital market ended 2025 on a strong footing, delivering one of the best performances globally and raising expectations that the bullish trend could extend into 2026, potentially marking a seventh straight year of gains.
Driven by renewed foreign portfolio inflows and sustained domestic participation, the Nigerian Exchange (NGX) recorded an average equity return of 51.19 per cent in 2025, translating to net capital gains of ₦32.13 trillion.
The performance placed Nigeria among the world’s top-performing equity markets, outperforming major economies such as the United States, United Kingdom, Germany, France and China, where average returns were below 25 per cent.Market activity remained robust across both primary and secondary segments. New capital raisings approached ₦7 trillion, while commercial paper issuances neared ₦1 trillion, reflecting increased reliance on capital markets amid high interest rates and tighter bank credit conditions.
By early 2026, continued buying pressure pushed total equity market valuation to the ₦100 trillion mark, reinforcing positive sentiment.However, analysts note that 2026 presents a complex backdrop. As a pre-election year, the market faces heightened political risks alongside the first full year of implementation of the Investment and Securities Act (ISA) 2025 and newly enacted tax reforms.
While these reforms aim to strengthen investor protection and market transparency, experts warn that policy uncertainty or inconsistent implementation could trigger volatility, particularly among foreign investors.Recapitalisation programmes in the banking and insurance sectors are also expected to dominate market activity in the first half of the year, driving equity issuances, mergers and acquisitions, and corporate restructuring.
While analysts expect fewer disruptions than in past recapitalisation cycles, concerns remain around potential share dilution and distressed asset sales.Despite these risks, market outlooks remain largely positive. Afrinvest West Africa projects a 40.9 per cent gain in the NGX All-Share Index (ASI) in 2026, citing easing inflation, stable foreign exchange conditions, improving corporate earnings and pre-election liquidity.
Cordros Capital forecasts a return of about 34.9 per cent, supported by attractive valuations and macroeconomic stability.Further upside could come from anticipated major listings, including entities in energy, manufacturing and technology.
Market operators say such listings would deepen liquidity and broaden sectoral representation.President Bola Tinubu has reaffirmed his administration’s commitment to pro-market reforms, describing the ₦100 trillion market capitalisation milestone as a signal of renewed investor confidence. Regulators and market leaders have also pledged to ensure consistent policy execution, improved transparency and stronger enforcement to sustain the rally.
