Nigeria’s sweeping economic reforms have continued to pay-off in the stock market, while strengthening investor confidence as 2026 unfolds. Improved policy clarity, macroeconomic stabilisation, and renewed regulatory discipline have lifted sentiment on the Nigerian bourse, making both domestic and foreign investors to stay glued to equities while the year progresses. As reforms deepen, the stock market is increasingly viewed as a credible platform for long-term growth and value creation.
“We maintain a positive outlook for the domestic equities market. Stemming off expectations of heightened investor confidence, due to a more stable macroeconomic environment, improved credit ratings, corporate actions, ongoing reforms, and movements in fixed-income yields. These factors are anticipated to support higher equity valuations and attract stronger foreign inflows in 2026,” Meristem Research said.
The stock market has stayed in the green since this year while rally presses on as investors continue to price-in stable macroeconomic variables, stronger foreign portfolio investment (FPI) inflow, and full year 2025 corporate actions.
In addition to the general economic reforms seen to bode well for the equities market in 2026, other factors expected to fuel the market’s positives this year include the movement in fixed income (FI) yields, better-than-expected companies’ earnings growth, and stocks attractive valuations.
Year 2025 was a remarkable one for Nigeria’s stock investors who saw their investments rise by 51.19 percent as against 37.65 percent in 2024. Also, the stock market’s value rose by N36.62trillion in 2025 as capitalisation reached N99.4trillion as against 2024 low of N62.76 trillion.
In the just ended full trading week into 2026, the stock market after six consecutive days of positives surpassed the N100trillion market capitalisation threshold to settle at N103.731trillion on Friday January 9. Likewise, the NGX-ASI has historically crossed the 160,000 psychological points. It stood at a new high of 162,298.06 points on Friday.
“We expect the All-Share Index to settle at 240,470 points, implying a return of +54.53 percent by full year 2026 from the close of December 31, 2025,” according to Meristem Research analysts who said they used ARIMA model to obtain a forecast of the NGX-ASI using monthly data on the All-share Index.
An ARIMA model (Autoregressive Integrated Moving Average) is a powerful statistical tool for time series analysis and forecasting, combining past values and errors to predict future data points, useful for data with trends or seasonality like sales or stock prices.
According to them, “the popularity of the ARIMA model is due to its inherent properties, which reduce the effect of seasonality in stock market variables, and its capacity to model the random noise in the data”.
Also, CardinalStone Research analysts said their overweight stance on Nigerian equities is underpinned by a strengthening macroeconomic backdrop and improving market dynamics.
Accordingly, they noted that stronger-than-expected GDP growth, easing inflation, and sustained currency stability have bolstered investors’ sentiment, while enhanced FX transparency and more efficient capital repatriation mechanisms are attracting renewed foreign portfolio participation,
“In addition, the potential reclassification of Nigeria to Frontier Market status by FTSE Russell (formal review due in March 2026) could unlock further foreign inflows and deepen market liquidity. Meanwhile, the NGX’s transition to a T+2 settlement cycle should improve trading efficiency and align the market more closely with global standards,” CardinalStone Research analysts further said in their asset allocation guide for 2026.
Further in their 2026 full year outlook, Meristem Research analysts said that given their expectations of strong earnings performance across sectors in 2026, “returns are likely to be increasingly driven by earnings growth, as such the index P/E ratio is expected to moderate further”.
“Our outlook on the local bourse remains positive, as we foresee further gains for the NGX-ASI in 2026. This view is based on our assessment of key themes that we expect to shape investors’ sentiment,” they added.
While Meristem Research analysts anticipate strong stock investor performance in 2026, they expect retail investors transactions to continue to improve in the near term, “driven by increased younger population interest in the stock market and wider market awareness initiatives”.
“At this run rate, retail investors’ transaction is expected to average 60 percent of total domestic transactions over the next 5 years, if macro fundamentals remain supportive,” Meristem research added.
“Nigeria is no longer a frontier market to be overlooked, it is now a compelling investment destination where value is being created and discovered,” President Bola Ahmed Tinubu said recently while commending Nigerian Exchange Group (NGX Group), corporate Nigeria, market operators, and investors for propelling NGX past the historic N100 trillion market capitalisation mark while emphasising that robust stock market performance reflects broader economic health and rising investor confidence.
Emomotimi Agama, Director General, SEC said the N100 trillion mark reflects the outcome of a deliberate regulatory strategy focused on building a fair, transparent, and resilient capital market.
“This milestone is not just about numbers; it reflects the impact of sustained reforms anchored on enhanced investor protection, market integrity, and long-term confidence,” Agama said.
“As we look ahead to 2026, NGX Group remains focused on deepening partnerships with regulators, issuers, market operators, policymakers, and the wider financial ecosystem to sustain this 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,” said Temi Popoola, Group Managing Director/Chief Executive Officer, Nigerian Exchange Group.
“We are bullish on the stability and recovery of key fundamentals of the economy, even as our optimism is guided with caution. We are deploying more capital across our flagship businesses, including the financial services, agriculture, real estate and technology portfolio,” Lizzie Kings-Wali, Chief Executive Officer, 4Stone Capital Limited said in a recent interview.
Looking at the economy, Lagos-based Coronation research analysts identified optimistic scenario in 2026 such as possibility of higher than projected FX inflows, quicker transmission of reforms in the macroeconomic environment, continued disinflation, and increased portfolio investment, leading to firmer exchange rate stability and stronger output growth.
Meanwhile their pessimistic economic scenario is built on a possible setback, either political or economic, such as weaker export oil production, delayed or rolled back policy execution, highly elevated political spending ahead of the elections, and renewed FX pressures – all of which could keep inflation higher for longer, limit monetary policy flexibility, and weigh on growth outcome.
