Nigeria’s equities market has recorded its strongest performance in nearly two decades, as the total value of trades on the Nigerian Exchange (NGX) surged to N6.92 trillion between January and August 2025 — the highest in 18 years.
The figure, which more than doubles the N3.47 trillion traded throughout 2024, reflects a renewed wave of investor confidence in the capital market despite the prevailing high-interest-rate environment.
According to NGX data, domestic investors dominated activity with N5.46 trillion (78.99 percent) worth of trades, while foreign investors contributed N1.45 trillion (21.01 percent). Monthly data showed notable activity spikes, particularly in March (N1.115 trillion) and July (N1.815 trillion).
Local Investors Fuel Market Momentum
Financial analyst Abiola Rasaq told BusinessDay that the sharp rise in market turnover highlights a broad improvement in market liquidity, with domestic retail investors accounting for one-third of total activity.
“This surge in participation shows growing confidence in equities as a better store of value compared to fixed-income instruments,” Rasaq said. “Retail investors have become more active, partly due to digital access provided by stockbrokers and easier trading platforms.”
He added that the NGX’s five consecutive years of positive returns have strengthened local appetite for equities, even as FX market stability encourages the reallocation of speculative capital from foreign currency holdings into stocks.
Rasaq further observed that institutional investors — including pension fund managers — have increased their exposure to equities, now allocating over 11 percent of portfolio assets to the domestic market.
Policy Stability Key to Sustaining Gains
For foreign investors, confidence remains tied to stability and predictability. Sam Onukwue, Chairman of the Association of Securities Dealing Houses of Nigeria (ASHON), stressed the need for a transparent foreign exchange regime and clear repatriation policies to attract more offshore capital.
“Government must ensure consistency in policy direction and uphold the sanctity of contracts,” he said. “A transparent, market-driven approach to privatisation will also make our market more attractive.”
Data from the NGX shows that between January and August, foreign inflows stood at N704.87 billion, while outflows totalled N748.23 billion, signalling cautious optimism from offshore investors.
Despite the strong rally, analysts note that in dollar terms, trading value for the period — roughly $4.7 billion — remains below historical peaks when adjusted for inflation and exchange rates.
The NGX All-Share Index has returned over 42 percent year-to-date, buoyed by consistent buying from both institutional and retail investors. Analysts at Coronation Research predict the market will maintain a “slightly bullish bias” as investors position for the Q3 2025 earnings season.
“Market sentiment will hinge on corporate earnings releases, dividend guidance, and macroeconomic signals,” the analysts said. “While short-term volatility may persist, the medium-term outlook is constructive, supported by strong corporate fundamentals and attractive valuations.”
