The Nigerian capital market is expected to record a mild recovery in the second half of 2026, driven by improving corporate earnings, stronger macroeconomic fundamentals and sustained economic reforms, despite lingering concerns over inflation, high interest rates and political uncertainty ahead of the 2027 general elections.
This projection was made by the Chief Executive Officer of Highcap Securities Limited, , during a presentation titled, “Review of Capital Market Performance for First Half Year 2026 and Outlook for Second Half,” delivered on Tuesday.
Adonri said the equities market experienced an unprecedented five-month rally in the first half of the year before undergoing a sharp correction in June, stressing that the decline reflected institutional portfolio repositioning rather than any deterioration in the underlying fundamentals of the market.
According to him, both the debt and equities markets delivered exceptional performances during the first five months of the year, supported by economic reforms, improved investor confidence and strong corporate earnings.
He noted that the primary market also remained active, with new listings and capital raising transactions amounting to about N6.95 trillion during the first half of the year.
Adonri disclosed that foreign portfolio participation strengthened significantly, with foreign investors accounting for N973.4 billion, representing 12.33 per cent of total market transactions during the first five months of 2026.
He explained that the Nigerian Exchange recorded one of its strongest rallies in history before profit-taking and institutional portfolio adjustments triggered a broad market correction in June.
Market statistics presented by Adonri showed that the NGX All-Share Index rose from 165,370.4 points in January to 250,385.47 points in May before easing to 235,941.3 points as of June 19.
Similarly, market capitalisation expanded from N135.26 trillion in January to N198.25 trillion in May, reflecting the substantial wealth created during the prolonged rally.
Monthly market performance recorded gains of 6.27 per cent in January, 16.60 per cent in February, 4.19 per cent in March, 20.36 per cent in April and 3.35 per cent in May before declining by 5.77 per cent in June as investors locked in profits.
Sectoral performance showed that the oil and gas index emerged as the best-performing sector with a year-to-date return of 111.13 per cent as of June 19. The industrial goods sector followed with a return of 95.79 per cent, while the commodities index gained 61.29 per cent.
The banking sector returned 35.77 per cent, consumer goods advanced 18.14 per cent, while the insurance and sovereign bond indices posted negative returns of 1.75 per cent and 0.76 per cent respectively.
Adonri attributed the market’s resilience to improving macroeconomic conditions, noting that Nigeria’s real Gross Domestic Product growth increased from 3.87 per cent in 2025 to 3.89 per cent in May 2026, while the projected global economic growth of 3.1 per cent for 2026.
He added that although headline inflation edged higher from 15.15 per cent in December 2025 to 15.93 per cent in May 2026, the Monetary Policy Rate declined from 27 per cent to 26.5 per cent.
The foreign exchange market also recorded improved stability, with the naira appreciating from N1,435.76 to the dollar at the end of 2025 to about N1,370.64 per dollar by June 23, 2026.
Crude oil prices rose from $63.42 per barrel at the end of last year to about $77.70 per barrel, while Nigeria’s average daily crude oil production increased to approximately 1.7 million barrels per day.
External reserves also improved from $45 billion in December 2025 to about $51.14 billion by June 22, while average monthly Federal Government revenue rose to approximately N3.6 trillion during the first half of the year.
Adonri said Nigeria’s reform programme had continued to receive positive endorsements from international financial institutions.
He noted that the IMF acknowledged that the reforms had improved macroeconomic outcomes, while upgraded Nigeria’s sovereign credit rating to ‘B’ from ‘B-‘ with a stable outlook.
He added that affirmed Nigeria’s ‘B’ rating with a stable outlook, while upgraded the country’s sovereign rating to B3 from Caa1, citing improved macroeconomic stability and rising investor confidence.
Looking ahead, Adonri expressed optimism that the equities market would gradually recover in the second half of the year, supported by stronger corporate earnings and improving company fundamentals despite expectations that interest rates would remain relatively high.
He also projected a realignment of exchange-traded fund valuations with underlying fundamentals, activation of Nigeria’s commercial paper and derivatives markets, and described the anticipated listing of the as a potential game changer for the country’s capital market.
However, he cautioned that persistent inflationary pressures, political uncertainty ahead of the 2027 elections, simultaneous capital raising by companies, insecurity and geopolitical tensions in the Gulf region could moderate market performance.
According to him, the recent market correction should not be interpreted as a sign of structural weakness but rather as a healthy adjustment following an extraordinary rally.
He maintained that sustained economic reforms, improving macroeconomic stability and stronger corporate fundamentals would determine whether the Nigerian capital market resumes its upward trajectory in the second half of 2026.
