Nigeria’s equities market recorded a 57 per cent return in the first seven months of 2026, driven largely by stronger domestic investment rather than a resurgence in foreign portfolio inflows, the Managing Director of Coronation Asset Management, Aigbovbioise Aig-Imoukhuede, has said.
Aig-Imoukhuede made the submission on Friday at the H1 2026 Capital Market Review and Outlook for the Second Half of the Year, where he said the performance of the Nigerian Exchange (NGX) reflected stronger domestic participation, improving macroeconomic conditions and rising investor confidence.
As of the end of July, the NGX All-Share Index had gained 57 per cent, while total market capitalisation rose by N58.9 trillion to N158.2 trillion.
He said the performance placed Nigeria among the world’s strongest-performing equity markets in dollar terms, according to Bloomberg data.
However, Aig-Imoukhuede cautioned investors against assuming that the rally would continue without a reassessment of market fundamentals, noting that the strong gains could represent either a sustainable structural recovery or a temporary market re-rating.
He said one of the most significant features of the 2026 rally was the changing composition of market participation, with domestic investors emerging as the dominant force even as foreign participation declined.
By June 2026, foreign investors accounted for 12.1 per cent of total NGX transaction value, compared with 27 per cent a year earlier.
Aig-Imoukhuede, however, said the decline did not amount to a complete withdrawal of international investors from Nigeria, noting that the value of foreign investors’ portfolios increased modestly from N1.13 trillion to N1.16 trillion in the first half of the year.
“What changed was the scale of domestic participation, which expanded at a far more significant pace of 129.1 per cent,” he said.
He noted that foreign portfolio investors were net sellers of Nigerian equities in the first six months of the year despite the broader market rally, partly because short-dated Nigerian government securities offered yields close to 20 per cent.
“From a pure risk-adjusted perspective, that allocation decision was understandable,” he said.
According to him, domestic institutional investors, particularly pension funds, played a major role in the equities rally following changes to investment thresholds by the National Pension Commission (PenCom).
The resurgence in domestic retail participation also contributed significantly to the market’s performance.
Aig-Imoukhuede rejected concerns that increased domestic participation represented a weakness, arguing that a market supported by domestic savings could become more resilient.
“If anything, this is a sign of market maturity. Markets become more resilient when they are supported by savings rather than speculation,” he said.
Despite the strong performance, he acknowledged that the rally had been relatively narrow and would require broader participation and stronger fundamentals to sustain the gains.
He said the key question for the second half of 2026 was whether Nigeria could attract a new wave of international capital.
According to him, the second half could provide a potential re-entry window for foreign investors as conditions around market classification, foreign-exchange liquidity, reserves and corporate earnings improve.
He said international index providers were increasingly paying attention to Nigeria, noting that FTSE Russell was reviewing the country’s position within its Frontier Market Index framework, while S&P Dow Jones Indices had placed Nigeria on a watchlist for possible reclassification from standalone to frontier-market status.
Although neither outcome was guaranteed, he said any change in Nigeria’s classification could have significant implications for international capital flows, particularly passive investment.
“Global capital follows confidence, but domestic capital trades on it,” he said.
The Coronation executive also pointed to improvements in Nigeria’s foreign-exchange market as a factor that could strengthen the country’s investment case.
He said improved FX liquidity, a stronger naira and reserve accumulation supported by more sustainable sources of foreign-exchange inflows were important indicators of external resilience.
He added that foreign investors would be particularly interested in the sustainability of exchange-rate stability, given the significance of currency risk when assessing Nigerian assets.
Corporate earnings, banking-sector recapitalisation and ongoing economic reforms were also identified as potential catalysts for renewed foreign investment.
Aig-Imoukhuede said the market’s decline in June, which marked the first sequential monthly decline during the period under review, should not necessarily be interpreted as weakening investor confidence.
Rather, he attributed the decline largely to profit-taking by domestic investors following the exceptional gains recorded in the first half of the year.
“Domestic investors were prudently locking in gains after a historic first half,” he said.
He maintained that the structural case for foreign investors to return to Nigeria was stronger than it had been at the beginning of 2026, although investors were likely to become increasingly selective.
He urged institutional investors to focus on companies with strong earnings momentum, sound corporate governance, adequate liquidity and clear prospects of benefiting from renewed international participation.
On monetary policy, Aig-Imoukhuede said the Central Bank of Nigeria (CBN) was expected to maintain its Monetary Policy Rate broadly around current levels as investors continued to assess the relative attractiveness of fixed-income and equities markets.
The CBN has maintained the MPR at 26.5 per cent for two consecutive meetings following a 50-basis-point reduction from 27 per cent in February.
He described the decision to maintain the rate as deliberate and data-dependent, citing global uncertainty, geopolitical tensions and volatility in domestic inflation.
Headline inflation stood at 15.43 per cent in July, although he noted that the decline had not been linear and that food-price pressures remained influenced by structural factors, including supply-chain constraints, logistics, agricultural cycles and exchange-rate movements.
“At Coronation Research, our base case remains that the MPR will broadly hold at current levels through year-end. We are not forecasting a dramatic policy pivot. We are forecasting disciplined, data-dependent stability,” he said.
According to him, monetary-policy stability could create an environment in which long-term capital could be deployed with greater confidence.
He also identified opportunities in quality credit, infrastructure debt and selected fixed-income instruments, adding that Coronation remained committed to infrastructure financing, particularly in the energy and transport sectors.
Beyond market returns, Aig-Imoukhuede said Nigeria’s capital market had a broader responsibility to strengthen trust, transparency and institutional credibility.
He argued that attracting capital would not be sufficient unless the market developed institutions capable of providing the transparency, governance and investor protection required to retain it.
He described Nigeria’s capital market as being at an inflection point, with the first half of 2026 demonstrating the growing strength of domestic capital and the second half likely to test whether international investors were prepared to return.
He expressed optimism that Nigeria was better positioned than in previous years to attract both domestic and foreign investment, provided reforms were sustained, market institutions strengthened and macroeconomic stability maintained.
“The opportunity before us is not simply to deliver market returns. It is to build a capital market that is deeper, more trusted, more liquid and more globally relevant,” he said.
He urged asset managers, market operators, regulators and other stakeholders to ensure that Nigeria’s market infrastructure and institutions were prepared to absorb renewed international investment.
“Our responsibility as firms and as an industry is to ensure that when capital chooses Nigeria, it finds institutions that are prepared, markets that are credible and opportunities that are compelling,” he said.
