The Nigerian equities market is projected to deliver a 45.9 percent return in 2026, driven by improving macroeconomic stability, pre-election liquidity, expected monetary easing, and major corporate listings. This outlook was presented by Market analyst and Managing Director of Arthur Steven Asset Management Limited Olatunde Amolegbe, at the Capital Market Correspondence Association of Nigeria (CAMCAN) 2025 Capital Market Review and Prognosis for 2026, in a presentation titled “2025 Macroeconomic Review and Outlook for 2026: Stabilisation, Structural Reform, and Market Repricing.”
According to Amolegbe, the firm remains constructive on the Nigerian equities market, noting that stability in prices and the foreign exchange market, alongside modest interest rate cuts and active capital raising by institutional investors, should support strong market performance in the coming year.
Key Drivers of Market Growth
The Arthur Steven chief highlighted several factors expected to underpin market growth in 2026. Planned listings, particularly within the Dangote Group, could significantly enhance market depth and sector representation on the Nigerian Exchange (NGX).
“We expect the NGX to deliver a 45.9 per cent return in 2026 under our base-case scenario,” Amolegbe said. “Stable macro conditions, ample liquidity ahead of elections and renewed investor confidence continue to reinforce our bullish outlook.”
In a more optimistic scenario, faster disinflation, aggressive monetary easing of 400–900 basis points, stronger corporate earnings, increased foreign portfolio investment inflows, and additional large-scale corporate listings could drive even higher equity returns.
However, Amolegbe cautioned that risks remain, particularly around capital gains tax sensitivity and potential delays in major listings, which could moderate overall market performance.
Pre-Election Liquidity and Market Volatility
Amolegbe also highlighted that elevated liquidity ahead of the 2027 general elections, driven by pre-election spending and fiscal expansion, is expected to stimulate market activity.
“While this could boost market activity, it may also heighten volatility in equities and the foreign exchange market, prompting investors to adopt more tactical and short-term strategies,” he said.
Corporate Developments and IPOs
On corporate developments, anticipated listings such as the Dangote Refinery and Dangote Fertiliser initial public offerings, as well as the planned separate listing of Airtel Money in the first half of 2026, are expected to improve market liquidity and attract broader investor participation.
Foreign exchange market stability remains a key pillar for sustaining foreign investor interest. As global interest rates normalise, foreign portfolio investors are increasingly assessing the durability of Nigeria’s FX reforms and the naira’s recent stability, which continues to support attractive carry trade opportunities in high-yield naira assets.
Fiscal and Tax Reforms
On fiscal matters, Amolegbe noted that tax reforms scheduled to take effect in January 2026 will reshape cost structures across several sectors, particularly consumer goods and industrials. He added that capital gains tax reforms could influence investor behaviour by encouraging longer holding periods and more cautious trading ahead of elections.
Asset Allocation and Investment Strategy
Turning to asset allocation, Arthur Steven is maintaining its framework from the second-half 2025 outlook, recommending a portfolio mix of 70 percent equities, 20 percent fixed income, and 10 percent cash.
“We retain an overweight position in equities, reflecting strong market sentiment and the continuation of the bull cycle,” Amolegbe said, noting that the NGX All-Share Index gained over 50 percent in the previous year, supported by naira stability, improved earnings visibility, and renewed foreign investor interest.
While fixed income remains attractive, its relative appeal is expected to moderate as investor flows rotate into risk assets amid improving macroeconomic conditions. The cash allocation is designed to preserve liquidity and provide flexibility to capitalise on market dislocations and tactical opportunities.
Amolegbe concluded that the combination of stabilising macroeconomic indicators, structural reforms, and renewed investor confidence positions the Nigerian financial market for robust performance in 2026.
