Yemisi Izuora
The Chief Executive Officer of HighCap Securities Limited, David Adonri, has said that Nigeria’s stock market would witness a mild recovery in the second half of 2026, supported by improving corporate fundamentals and sustained macroeconomic reforms, despite persistent high interest rates and mounting political and economic risks,.
Speaking during the Capital Market Correspondents Association of Nigeria (CAMCAN) Mid-Year 2026 Capital Market Review and Outlook in Lagos, Adonri projected that the equities market would gradually regain momentum as investors respond to stronger corporate earnings, improved economic indicators and growing confidence in Nigeria’s reform agenda.
He, however, cautioned that inflationary pressures, the build-up to the 2027 general elections, insecurity, simultaneous capital-raising exercises and the ongoing conflict in the Gulf region could pose significant downside risks to market performance in the months ahead.
According to him, the recent correction witnessed on the Nigerian Exchange should not be interpreted as a sign of structural weakness in the capital market but rather as a normal phase of institutional portfolio repositioning following the strong rally triggered by economic reforms.
“The current market correction is a result of institutional investors repositioning their portfolios and not an indication of a breakdown in market fundamentals,” he said, adding that investor sentiment remains largely supported by improving macroeconomic conditions.
Adonri projected a mild recovery in the equities market in the second half of the year, driven by stronger corporate fundamentals and better earnings prospects across listed companies.
He also predicted that the current high interest rate environment would persist, although he expects Exchange Traded Products (ETPs) to witness a realignment in valuations with their underlying fundamentals as market conditions improve.
In addition, he said the activation of the commercial papers and derivatives markets would deepen Nigeria’s capital market, broaden investment opportunities and improve liquidity.
One of the most significant developments expected in the coming months, according to Adonri, is the anticipated listing of Dangote Refinery on the Nigerian Exchange, which he described as a potential game changer capable of transforming the size, depth and attractiveness of the domestic capital market.
Reviewing Nigeria’s macroeconomic performance, Adonri noted that recent economic reforms have continued to receive international endorsement.
He pointed out that the International Monetary Fund (IMF) has acknowledged that the reforms are yielding improved macroeconomic outcomes, while leading global credit rating agencies have upgraded or affirmed Nigeria’s sovereign credit ratings.
He recalled that S&P Global Ratings upgraded Nigeria’s sovereign credit rating to ‘B’ from ‘B-‘ with a stable outlook in May 2026.
Fitch Ratings also affirmed the country’s rating at ‘B’ with a stable outlook, while Moody’s upgraded Nigeria to ‘B3’ from ‘Caa1’.
According to him, the improved ratings reflect growing confidence in Nigeria’s economic management, supported by increased foreign exchange stability, rising external reserves and higher crude oil production.
On the broader economy, Adonri cited growth forecasts by the World Bank and IMF, which project Nigeria’s economy to expand by 4.1 per cent in 2026, while the Central Bank of Nigeria (CBN) forecasts a stronger 4.49 per cent growth rate.
He identified rising crude oil production, expanding domestic refining capacity, improving foreign reserves and a relatively stable and appreciating naira as major positive indicators expected to support investor confidence and economic growth.
Despite these gains, he warned that inflationary pressures remain elevated, while political activities ahead of the 2027 elections could heighten uncertainty in financial markets. He also noted that concurrent capital-raising programmes by companies, lingering insecurity and geopolitical tensions arising from the Gulf conflict may affect capital flows and investor sentiment.
Adonri stressed that the performance of the capital market is ultimately determined by prevailing socioeconomic and political conditions.
According to him, changing economic realities can either stimulate or constrain market growth, making policy consistency and macroeconomic stability essential for sustaining investor confidence.
He concluded that while the reform-driven rally in the Nigerian capital market has entered a phase of correction, the underlying fundamentals remain intact, expressing optimism that the market is well-positioned to recover gradually in the second half of 2026 as institutional investors complete their portfolio adjustments and economic reforms continue to gain traction.