The Nigerian equities market posted a robust performance in the first half (H1) of 2025, delivering an impressive ₦13.19tn in capital gains to investors, amid a 16.57 per cent year-to-date appreciation in the benchmark All-Share Index (ASI) of the Nigerian Exchange Limited (NGX).
The ASI rose from 102,926.40 points at the start of the year to 119,978.57 points as of June 30, 2025.
In tandem, market capitalisation jumped from ₦62.763tn to ₦75.951tn, underscoring the market’s resilience in the face of persistent economic headwinds, including elevated inflation, currency depreciation, and political uncertainties.
This performance signals increasing confidence among domestic investors, buoyed by favourable macroeconomic policies, structural reforms in the financial sector, and a strategic shift in capital allocation toward equities amid low returns in the money market.
A key catalyst for the rally was the wave of capital-raising activities by Nigerian banks, triggered by the Central Bank of Nigeria’s (CBN) directive on new minimum capital requirements.
The CBN now mandates a minimum of ₦500bn for international banks and ₦200bn for national banks.
In response, many banks have launched public offers, rights issues, private placements, and listings by introduction—moves that deepened liquidity and spurred investor interest.
These fund-raising exercises, largely facilitated through the NGX, have not only strengthened the capital adequacy of banks but also increased investor engagement in the market.
Monetary dynamics also played a supportive role. With money market yields falling below 2024 levels, many investors rotated into equities in search of better returns. The ongoing earnings season provided additional impetus, with dividend expectations lifting buying sentiment, particularly in the banking sector.
Speaking with THE WHISTLER, Executive Vice Chairman of Hicap Securities Limited, Mr. David Adonri said the earnings season was instrumental in driving demand.
“Most companies, especially banks, released their half-year results during the quarter. The market normally sustains positive sentiment during earnings season,” he said.
Adonri noted that despite political uncertainties, investors have remained largely forward-looking. “The equities market is defying current political uncertainties because investors are futuristic. The prospect for a favourable yield environment is bright,” he added.
Managing Director of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe pointed to a fundamental shift in market demographics, with local retail and institutional investors now playing a dominant role—marking a reversal from previous years when foreign portfolio investors largely dictated market direction.
“This shift has naturally reduced volatility in stock prices, as local investors tend to have more faith in the market,” Amolegbe explained. “That’s why you see the NGX ASI continuing to rise despite all the uncertainties in the environment.”
He also highlighted that optimism around government policy reforms, particularly those aimed at boosting foreign direct investment, has further strengthened investor confidence.
“Some of these policies will also lead to a short-term increase in inflation levels, and typically, stock prices tend to rise along with inflation,” he noted.
Looking ahead, market analysts believe that Nigeria’s equities market is well-positioned for sustained growth, supported by improved regulatory clarity, corporate earnings, and rising investor participation.
The strong H1 performance offers a glimpse into the resilience and potential of the Nigerian capital market as it adapts to a challenging yet reform-driven economic environment.