- Moderated Inflation Rate, Improved GDP and Stable FX Rate to Drive Positive Vibration
- PFAs Retain Position as Major Market Players
- Recapitalisation Deadline to Drive Short-Term Rally in Banking Sector
Wole Olajide, ACS
The Nigerian stock market closed the year 2025 on a bullish note, with a growth of 51.19% year on year. The NGX All Share Index and Market Capitalisation closed the year at 155,613.03 points and N99.376 trillion respectively. The bullish trend continued into the new year, starting the year on a positive note with 0.57% growth year to date.
Capital market operators and experts have predicted a positive outlook for the year 2026 on the backdrop of positive macro-economic indicators.
The Managing Director of GlobalView Capital Limited, Aruna Kebira, affirmed that the market outlook is positive for 2026.
Mr. Kebira stated thus:
The outlook for the new year is positive based on the following:
- Inflation is expected to moderate in 2026 to an average of 12.94%, which will improve real returns for stockholders. The inflation rate dropped in November 2025 to 14.45%. Though, there could be a reversal for December 2025 because people spent money recklessly; but the increase will not be commensurate to the drop from October to November. Going forward, the inflation rate will be coming down.
- Recapitalisation of both the banking sector and the insurance sector is going to bubble the market. The March 31, 2026, deadline for banks is the most critical catalyst. Expect a flurry of activity—mergers, acquisitions, and rights issues—as laggard banks race to meet the new capital requirements.
- Impact of Pension Funds Administrators (PFAs) in the market. If you check the records, the exit of FDI (Foreign Direct Investment) has been loud. We now have PFAs (Pension Funds Administrators whose horizon is longer than any other in the market has been able to hold the market. The market being up on the first trade of the new year is an indication that the market is very serious.
- Expectation of the Dangote Refinery listing on the Nigerian Exchange (NGX) is going to create serious awareness. Just like what happened in 2004 when the banks were doing recapitalization, Dangote Refinery coming to the market is going to draw a number of attentions. Quite a number of people who are not market players have been reaching out that they are interested when Dangote Refinery is going to list on the Nigerian Exchange. This will drag a lot of people to the market and there will be money flow inside the market. And when they cannot get Dangote Refinery, as it cannot get to everybody, they will go for a substitute. With this, the market will go up.
- The Naira is stable against the dollar. The Gross Domestic Product (GDP) is growing.
“As we speak now, nothing is against 2026 yet except for the fact that it’s a pre-election year”.
Between now and the end of June, the result of 2025 will impact the market positively. We may see a withdrawal from July when the effect of Q1 2026 and Q4 2025 are waning in the market. You never can tell; our market has matured. You might even discover that while we are thinking that 2026 is a pre-election year, the market isn’t going to react as we expect it to because PFAs are now holding the market seriously. What normally drag the market down before is when foreign investors pull out their funds. Since October, November of 2025, foreign investors have been pulling out; but it has not affected the market because the local participation now has so much weight that it can weather the impact of the exit of Foreign Direct Investors. So, 2026 for me is very positive”.
“The prices we saw in 2025, those prices will be breaking their 52 weeks low and setting new one. That is what I believe is going to happen in 2026”.
- Stocks to watch: Banking and Insurance stocks; especially those that will be able to make their capitalization. Oil and Gas (Aradel), manufacturing sector (Nestle, PZ and Cadbury).
The Managing Director/CEO of Arthur Stevens Asset Management Limited, Mr. Olatunde Amolegbe, stated thus:
“I think a few macro-economic factors points to the prospect of a positive outcome for the stock market this year.
We are seeing accelerating GDP growth; inflation rate is slowing, exchange rate is stable, interest rate is likely to trend downwards and it appears the government is taking proactive steps to tackle insecurity at this time.
All of this should ultimately be positive for the market.
International crude oil prices however possess a medium-term threat.
Stocks to Watch: We believe the industrial and consumer goods companies will continue to do well however dividend paying financial stocks should also do well”
Jide Dahunsi, Group Head, Investment Research at SCM Capital Limited, stated thus:
The equity market will be broadly positive, sustaining the appreciation in the preceding year on the back of positive key economic indicators.
Sentiments in the local bourse will be influenced by the completion of the Banking & Insurance industry recapitalization, moderating inflationary price, improving business climate, foreign exchange position, the new tax regime, fiscal spending & debt, monetary policy dynamics and global spillovers.
Sectoral performance is expected to be mixed, with the Consumer goods leading the pack as banking and industrial goods sectors are to trail along while Insurance sector performance may lag due to valuation dynamics.
Corporate financial reports may see some extra-ordinary gains evaporate (forex gain, gain on financial instrument FVTPL, assets disposal etc.) as the real sector could benefit from price action, volume growth and modest finance costs.
Investors may bet on the possibility of large-size rate cut and adjustment in some policy parameters (CRR, Asymmetry corridor) to improve system liquidity and boost lending. This is projected to impact fixed income yield.
Stock to Watch: Fundamentally sound stocks in the consumer goods index, MTN, Banking stocks, Cement stocks and a few other industrial goods”
Gilbert Ayoola, a seasoned capital market expert stated thus:
“Looking ahead to 2026, the outlook for the Nigerian capital market remains constructive. Expectations of further expansion in the All-Share Index and total market capitalisation are anchored on three core drivers:
- Macroeconomic Stabilisation: Continued moderation in inflation and sustained FX management is likely to support valuation re-rating and longer investment tenors.
- Earnings Growth: Corporate profitability is expected to remain on an upward trajectory as economic reforms filter through productivity, consumption and trade.
- Liquidity and Participation: Increasing domestic institutional participation, alongside selective foreign inflows, stand as catalyst in deepening liquidity and reduce volatility over time.
While market corrections are inevitable, they are expected to be largely technical and offer entry opportunities rather than signal structural weakness”.
Stocks to Watch
Mr. Gilbert Ayoola extensively listed the following stocks to watch:
- Banking (Zenith Bank, GTCO, Access Holdings, UBA, Stanbic IBTC, First HoldCo, Wema Bank)
- Telecommunications (MTN Nigeria, Airtel Africa)
- Consumer Goods (Nestlé Nigeria, Guinness Nigeria, Nigerian Breweries, Dangote Sugar, BUA Foods)
- Energy and Power (Seplat Energy, Geregu Power, Transcorp Power, Oando)
- Industrial Goods and Infrastructure (Dangote Cement, BUA Cement, Lafarge Africa)
- Healthcare and pharmaceuticals: Fidson Healthcare, May & Baker, MeCure and Neimeth
- Agriculture and Agro-Allied (Presco, Okomu Oil, FTN Cocoa Processors, and Livestock Feeds)
- Insurance (AIICO Insurance, AXA Mansard, Nem Insurance, Consolidated Hallmark, Mutual Benefit Assurance)
- Real Estate (UPDC REIT, SFS REIT)
- lCT and Digital Services (Chams, and CWG)”
In summary, while there are challenges on the horizon, the collective opinions of experts suggest that the Nigerian stock market is well-positioned for continued growth in 2026, driven by supportive economic conditions and strategic market movements.