Nigerian Stock Market to Deliver Modest but Attractive Returns in H2 2026: Economist

Nigerian capital market economist Professor Uche Uwaleke anticipates that the stock market will offer investors modest yet attractive returns in the latter half of 2026. This forecast follows an extraordinary 47.4% return achieved in the first half of the year. Uwaleke identified several key factors expected to drive market performance, including the listing of Dangote Refinery, FTSE Russell's decisions, cross-border listings, and corporate earnings reports.

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The Nigerian stock market is expected to deliver a more modest but still attractive return to investors in the second half of 2026.

However, Uwaleke also noted a potential challenge: the Central Bank of Nigeria (CBN) might increase its Monetary Policy Rate (MPR). This move is anticipated as part of efforts to tackle inflation, particularly in 2026, which is a penultimate election year. Historically, pre-election spending tends to drive inflation higher. If inflation is demand-driven, the CBN is likely to raise interest rates, which typically has an inverse effect on the equities market, benefiting the fixed income market instead.

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If inflation is demand driven, as a result of money supply, of course you will expect that the central bank will hike the interest rate. If the interest rate is further increased, the impact on the equities segments would be negative. The fixed income market will benefit once there is a hike in interest rate.

The Director-General of the Securities & Exchange Commission (SEC), Dr. Emomotimi Agama, stated that the capital market community is actively engaging with foreign investors. These discussions aim to address concerns raised by FTSE Russell and global institutional investors regarding Nigeria's T+1 settlement cycle. The MD/CEO of Arthur Steven Asset Management, Mr. Tunde Amolegbe, echoed the sentiment that the CBN's monetary policy direction will be the primary driver of market performance.

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The capital market community has engaged with foreign investors to address FTSE Russell, a global institutional investors and custodians to address concerns over Nigeria’s T+1 settlement.

Amolegbe added that investors will be closely monitoring whether further policy easing is possible, especially after the Monetary Policy Rate was reduced to 26.50%. The interplay between monetary policy, inflation, and investor confidence will be crucial in shaping the Nigerian stock market's trajectory for the remainder of 2026.

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Following the reduction of the Monetary Policy Rate (MPR) to 26.50per cent, investors will monitor whether further policy easing is possible.