Uwaleke: Stock Market Will Deliver Modest But Attractive Return in H2

Nigeria's stock market is poised for a more modest, yet still appealing, return for investors in the latter half of 2026, according to capital market economist Prof. Uche Uwaleke. This forecast follows an exceptional 47.4 percent return in the first half of the year.

Uwaleke identified several factors expected to propel the market, including the anticipated listing of Dangote Refinery, decisions from FTSE Russell, increased cross-border listings, and strong corporate earnings reports. However, he also noted the potential for the Central Bank of Nigeria (CBN) to raise its Monetary Policy Rate (MPR) as it seeks to curb inflation, particularly in the lead-up to the 2026 elections. Historical data suggests pre-election spending often fuels inflation, prompting central bank intervention.

"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," Uwaleke explained. "If the interest rate is further increased, the impact on the equities segments would be negative. There is an inverse between the interest rate and the stock market performance. Of course, the fixed income market will benefit once there is a hike in interest rate."

Dr. Emomotimi Agama, Director-General of the Securities & Exchange Commission (SEC), confirmed that the capital market community is actively engaging with foreign investors and custodians to address concerns regarding Nigeria's T+1 settlement system, a key point for FTSE Russell. Meanwhile, Mr. Tunde Amolegbe, MD/CEO of Arthur Steven Asset Management, highlighted the CBN's monetary policy direction as the primary determinant of market performance, with investors closely watching for any further policy easing after the MPR was reduced to 26.50 percent.

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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. There is an inverse between the interest rate and the stock market performance. Of course, the fixed income market will benefit once there is a hike in interest rate.