Seventh year of the bulls

The Nigerian capital market glided through 2025 in bright points, headlining positive reviews domestically and internationally. Is 2026 the seventh year of the bulls? In a pre-election year that will expectedly be nuanced with more pro-politics decisions and controversies, will the market stay the course and deliver higher performance? In the first full year for the implementation of new capital market and taxation laws, Deputy Group Business Editor, Taofik Salako, examines the underlying dynamics that will drive the bulls and the bears in new fiscal year

Nigerian capital market rose to new highpoints in 2025. Driven by stronger inflows of foreign capital and steady domestic demand, the capital market strode through the odds to deliver record performance. Average equities’ return was 51.19 per cent, one of the world’s five best-performing stock markets. New capital raisings stood at about N7 trillion, with the market becoming a crucial support for government and corporate growth plans. Record turnover at the secondary market and a steadily active primary market combined to shape a market that has increasingly become relevant. The All Share Index (ASI) of the Nigerian Exchange (NGX) – which doubles as Nigeria’s sovereign equities index, closed 2025 with a full-year return of 51.19 per cent, equivalent to net capital gain of N32.13 trillion.  The performance at the Nigerian market more than doubled returns across several advanced and emerging markets, including the United States, United Kingdom, Germany, France and China where average indexed returns were below 25 per cent. Instructively, the MSCI All Country World Index- a global index that tracks large-cap stocks across developed and emerging markets, closed the year with average return of about 20 per cent. Both the debt and equities markets have shown stronger resilience, with more companies relying on short-term capital market-based debts to bridge gap created by high interest rates and less accessible bank loans. Commercial paper issuances, for instance, clocked almost N1 trillion in 2025, with the largest chunk from unquoted, private businesses.

The year is starting on a strong momentum for the market. Despite the traditional year-end and early-year spending, the bulls appear unrelenting. Continuing rally pushed the Nigerian equities valuation to a milestone of N100 trillion, in a starter hailed by several analysts as indicative of the general outlook for the year. But it is an early call.

Year 2026 is intriguingly loaded; a pre-election year, it is the first full fiscal year for the implementation of the new Investment and Securities Act (ISA) 2025 and the new Nigerian Tax Acts. Newness comes with a risk, of uncertainty, of flips and flops. Where regulatory understanding differs with operators’ perception, such tautness often comes with visible market reaction. Especially in a market increasingly susceptible to foreign portfolios’ adjustments. Nigeria’s thrilling foreign capital destination is a gain in a stable macroeconomic environment, but it’s also a major risk in case of policy changes and new implementation.

This year also comes with the cumulation of major policies in the financial services industry, especially the recapitalisation programmes in the banking and insurance sectors. The full extent of the recapitalisation exercises will dominate the first half of the market- in public and private equity raising, mergers and acquisitions, takeovers and splits.

While most analyses expected less casualties in the banking sector’s recapitalisation compared to the previous exercises, there is still the fear of dilutions, distress sales and complete loss; in the event of regulatory takeover or forced liquidation. These are the themes that will dominate the market in the months ahead. Still substantially undervalued relative to peers, the market obviously is running ahead of the economy in resilient forward-pricing. Such outlook tends to defy minor flops and fluctuations in fiscal and monetary environment. But a major misstep, in a pre-election year, will have more profound effect on the market.

Seventh year of the bulls

Most analysts expected the Nigerian market to continue its bullish run. Most projections saw average equities’ return remaining within positive double digit, stretching Nigerian market’s bullish run to its seventh consecutive year. Average equities’ return is expected at between 30 and 50 per cent. Analysts at Afrinvest West Africa stated that sharper disinflation, stronger foreign exchange (forex) inflows and stable macroeconomic environment should sustain the rally.

“In our base case scenario, we project a 40.9 per cent gain in the NGX-ASI, supported by sustained price and naira stability, gradual monetary policy easing, improved corporate earnings, elevated pre-election liquidity, and aggressive capital mobilisation by insurance companies and pension funds adminsitrators (PFAs), with additional upside from anticipated listings such as Dangote Petrochemicals,” Afrinvest stated. It however cautioned that renewed inflationary pressures, forex volatility, weak foreign participation, and delays in expected listings could undermine the market.

Cordros Capital Group, which predicts average return of 34.9 per cent for the ASI in 2026, stated that a firmer macro backdrop, earnings growth and attractive valuations should continue to underpin equity performance in the months ahead.

“For equities, while risks remain present, the balance of probabilities remains favourable. All told, 2026 is positioned to extend the market’s recovery cycle as a progressively easing policy environment, firmer macro stability and deepening investor confidence reinforce both earnings resilience and valuation expansion across key sectors,” Cordros Capital stated.

GTI Capital Group added that with the potential listings of major new issuers expected in 2026, including the 10 per cent landmark offer of the Dangote Refinery, the Nigerian National Petroleum Company (NNPC), alongside the Dangote Fertilizer Plant and fintech heavyweight, Flutterwave, Nigeria’s equity market could see a meaningful expansion in depth, liquidity, volatility, and sectoral diversification.

Nigerian market had broken its previous regressive pre-election pattern in previous circle, and most analysts expected 2026 to sustain the new trend. A double-digit return in 2026 will mark the seventh consecutive bullish run for the Nigerian market. The ASI had made the top global chart in 2024 with average return of 37.65 per cent, equivalent to net capital gain of N15.4 trillion.  The ASI had closed 2023 as one of the three best-performing markets globally. Average return for Nigerian equities in 2023 stood at 45.90 per cent, equivalent to net capital gains of N12.81 trillion.

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The market had broken its well-known previous cycle of decline in pre-election year to record its third consecutive positive performance in 2022, with full-year average return of 19.98 per cent, equivalent to net capital gain of N4.455 trillion. It had closed 2021 with average return of 6.07 per cent, equivalent to net capital gains of N1.278 trillion. In the throes of the outbreak of COVID-19 pandemic in 2020, it had recorded average return of 50.03 per cent, representing net capital gains of N6.483 trillion. ASI closed 2023 at 74,773.77 points as against its opening index of 51,251.06 points for the year. It had opened 2022 at 42,716.44 points. Aggregate market value of all quoted equities had also risen from 2023’s opening value of N27.915 trillion to close the year at N40.918 trillion. It had recorded N22.297 trillion as opening value for 2022.

Voices of hopes

President Bola Tinubu, whose pro-market stance has been credited as a major force behind the increasingly positive perception of the market, has promised to sustain the momentum. Tinubu said the market is the economy and as such the government’s focus would remain unwavering in promoting attractive environment. “With the Nigerian Exchange (NGX) crossing the historic N100 trillion market capitalisation mark, the country is witnessing the birth of a new economic reality and rejuvenation”, Tinubu said, noting that the stock market performance underscored a fundamental shift in how Nigeria is perceived by global investors.

Tinubu expected a more robust outlook in 2026.

He said: “The pipeline for new and upcoming listings looks robust. More indigenous energy firms, tech unicorns, telecoms, and infrastructure-heavy entities are seeking to access the public market to fund their expansion. As these firms are listed, they will boost market capitalisation and deepen democratic ownership of the Nigerian economy”.

He assured that 2026 would deliver even stronger returns as the government’s economic reforms continue to gather momentum.

He said: “Nation-building is a process, not a destination. Hard work, sacrifices, and the focus of its citizens build a nation. The N100 trillion market capitalisation is a signal to the world that the Nigerian economy is robust and productive.

“As your leader, I pledge to continue working unrelentingly to build an egalitarian, transparent, and high-growth economy that will be further catalysed by the historic tax and fiscal reforms that came into full implementation from January 1”.

The President said that the government would consolidate on the gains of the previous year with sustained focus on key fundamentals of the economy.

He said: “Indeed, inflation is likely to fall below 10 per cent before the end of this year, leading to improved living standards and accelerated GDP growth. The year 2026 promises to be an epochal year for delivering prosperity to all Nigerians”.

Many of the new listings should come from the Tinubu’s government’s push for reform of state-owned enterprises (SOEs) and commercial interests. At least, the government has said it was concluding arrangements to list two electricity distribution companies (DisCos) and one generation company (GenCo) on the Nigerian Exchange (NGX).  Director General, Bureau of Public Enterprises (BPE), Mr. Ayodeji Gbeleyi, who was appointed by Tinubu mid 2024, said there would be unbundling of government’s equity stakes in two DisCos and a GenCo in first phase of transactions aimed at unlocking values and enhancing operating efficiency of national assets and state-owned enterprises.

He explained that the unbundling would be done by offering part of government’s residual equity stakes in the three power companies to the investing public through initial public offerings (IPOs). The transactions would involve part of 40 per cent equity stake and 30 per cent equity stake jointly owned by federal and state governments in the DisCos and GenCo respectively.  A more market-driven Tinubu government could see full or partial privatisation of scores of SOEs, including such agencies such as the National Parks Service, Nigeria Film Corporation, Federal Mortgage Bank of Nigeria (FMBN), and the Federal Housing Authority (FHA).

Group Managing Director, Nigerian Exchange Group (NGX Group), Mr. Temi Popoola said the market remains focused on sustaining the upward trend.

He said the NGX would remain focused on deepening partnerships with regulators, issuers, market operators, policymakers, and the wider financial ecosystem to sustain the bullish momentum.

“We are optimistic about the opportunities ahead and committed to positioning the Nigerian capital market as a key driver of economic growth and wealth creation, while advancing NGX Group’s vision as Africa’s preferred exchange hub,” Popoola said. The transition to a shorter trading settlement cycle, from four days, T+3, to three days, T+2, should enhance liquidity and price discovery.

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Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Mr. Sehinde Adenagbe however noted that while the market outlook remains positive, government should prioritise policy clarity to sustain investors’ confidence.

“We need more clarity on the issue of capital gain tax (CGT) which dragged the market down by about N4.8 trillion in a single market day. We support stricter compliance reviews, faster reporting timelines, and unified digital reporting platforms to reduce information gaps. The Investment and Securities Act (ISA) 2025 is a landmark reform. It expands the definition of securities, strengthens investor protection, and brings new products, including digital assets, under regulation. ISA 2025 also enhances Securiteis and Exchange Commission (SEC)’s oversight powers and has contributed to Nigeria’s removal from the FATF grey list in October 2025, supporting smoother international transactions. Stable forex reforms and exchange-rate unification have improved pricing predictability for foreign investors, supporting increased capital inflows. Going forward, policies are needed to encourage new listings, long-term institutional investment, market infrastructure improvements, and security measures to create a safe investment environment,” Adenagbe said.

He pointed out that while progress is evident, more work lies ahead.

He said: “Policies encouraging new listings, long-term institutional investment, improved infrastructure, and enhanced security will be critical. Our association is committed to safeguarding investor interests, enhancing transparency, and driving reforms to make the capital market more competitive, inclusive, and resilient”.

Director General, Securities and Exchange Commission (SEC), Dr. Emomotimi Agama said the apex capital market regulator would intensify implementation of the ISA 2025 with a view to strengthening investor confidence and market integrity.

According to him, the commission would apply the new laws “firmly and impartially” to address market abuse, insider dealing, fraudulent investment schemes, and other forms of misconduct in the capital market.

He however stressed that enforcement actions would be guided by due process and the rule of law, adding that predictable and consistent regulation remains critical to building trust among investors.

“We will regulate not to stifle, but to catalyse. We will enforce not to punish, but to protect and build trust,” Agama said.

As the political campaigns hot up, a stable macroeconomic environment may be enough to keep the bulls coming.  And despite recent global frictions, there is a strong basis to assume stability.