…Says Dangote IPOs To Reshape Nigerian Market
Yemisi Izuora
Improved macroeconomic stability, pre-election liquidity and expected monetary easing as well as anticipated major listings have been highlighted as key growth drivers that will enhance activities in the Nigerian Capital Market this year.
Making the assertion, the Managing Director of Arthur Steven Asset Management Limited and former president of Chartered Institute of Stockbrokers (CIS), Mr. Olatunde Amolegbe, projected a 45.9 per cent return for Nigerian equities in the 2026 financial year.
Amolegbe made the projection in a presentation titled “2025 Macroeconomic Review and Outlook for 2026: Stabilisation, Structural Reform, and Market Repricing” at the Capital Market Correspondence Association of Nigeria (CAMCAN) 2025 Capital Market Review and Prognosis for 2026, held in Lagos.
According to him, the firm remains constructive on the Nigerian equities market, noting that stability in prices and foreign exchange, alongside modest interest rate cuts and active capital raising by institutional investors, should support strong market performance in 2026.
He added that 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.”
He explained that in a more optimistic scenario, faster disinflation, aggressive monetary easing of between 400 and 900 basis points, stronger corporate earnings, increased foreign portfolio investment inflows, and additional large-scale listings could drive even higher returns for equities.
However, Amolegbe cautioned that risks remain, particularly around capital gains tax sensitivity and potential delays in major listings, which could dampen overall market performance.
Highlighting factors expected to influence equities in 2026, the Arthur Steven chief pointed to elevated liquidity ahead of the 2027 general elections, driven by pre-election spending and fiscal expansion.
He noted that 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.
On corporate developments, he said 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 significantly improve market liquidity and attract broader investor participation.
Amolegbe also identified foreign exchange market stability as a key pillar for sustaining foreign investor interest. As global interest rates normalise, he said foreign portfolio investors are increasingly assessing the durability of Nigeria’s FX reforms and the naira’s recent stability, which continue to support attractive carry trade opportunities in high-yield naira assets.
On fiscal matters, he noted that tax reforms scheduled to take effect in January 2026 will reshape cost structures across several sectors, particularly consumer goods and industrials, while capital gains tax reforms could influence investor behaviour by encouraging longer holding periods and more cautious trading ahead of elections.
Turning to asset allocation, Amolegbe said Arthur Steven is maintaining the framework outlined in its second-half 2025 outlook, recommending a portfolio mix of 70 per cent equities, 20 per cent fixed income and 10 per cent cash.
“We retain an overweight position in equities, reflecting strong market sentiment and the continuation of the bull cycle,” he said, noting that the NGX All-Share Index gained over 50 per cent in the previous year, supported by naira stability, improved earnings visibility and renewed foreign investor interest.
While fixed income remains attractive, Amolegbe said its relative appeal is expected to moderate as investor flows rotate into risk assets amid improving macroeconomic conditions.
The cash allocation, he added, is designed to preserve liquidity and provide flexibility to take advantage of market dislocations and tactical opportunities.
Amolegbe said the combination of stabilising macroeconomic indicators, structural reforms and renewed investor confidence positions the Nigerian financial market for robust performance in 2026.