Market News

The Nigerian capital market is something of an enigma. It is exceptionally resilient. It consequently stands out among global stock markets. 

The market has a penchant for springing pleasant surprises. In 2023 virtually all hope was lost in the Nigerian Exchange Group (NGX). Foreign portfolio investors fled the market in droves. No one had the patient to look back. The reason for the flight of the foreign portfolio investors was obvious.

Every investor hopes to repatriate the proceeds of investment to his home country. Nigeria was inadvertently blocking that development. Nigeria’s foreign exchange reserve loitered for years at a scant $33 billion. 

While that at the time could sustain 10 months imports, it could not foot the investment proceeds repatriation bills of the foreign portfolio investors.

With just $33 billion in the reserves, the Central Bank of Nigeria (CBN) could not allocate foreign exchange to foreign portfolio investors to repatriate the proceeds of their investments. 

Nigeria was inadvertently trapping billions of dollars in foreign portfolio investors’ funds.That was enough incentive for the flight of the foreign portfolio investors from Nigeria. 

They left, and no one in his right senses expected them back in the foreseeable future. In 2023 everything about Nigeria’s economy was just the gloomy projections. The naira was depreciating at a dangerous rate. 

By 2024, the naira was trading as low as N1,700 to the dollar. Just about every hope was lost. Then, just as the economic situation was so bleak, the President Bola Ahmed Tinubu administration seemingly worsened the situation by the withdrawal of petrol subsidy.

Most people in Nigeria regard petrol subsidy as the most equitable distribution of the nation’s income since the federal government was not willing to float a social security system that would shield the millions toiling below poverty line.

The federal government was consequently spending trillions of naira annually on petrol subsidy with the regulator of the oil industry seemingly being handed a blank cheque which it slotted 13 digit figures and emptied the treasury in a scheme no one was willing to probe.

Tinubu’s decision to withdraw petrol subsidy was a bitter pill for every Nigerian. The cost of evacuating food items from Nigeria’s inaccessible rural farming communities tripled and with it food inflation spiraled.

In 2023 the market capitalisation of the NGX was a scant N63 trillion. Many saw that as a sizable market. However, when converted to dollars at an exchange rate of N1,700, the capitalisation of the NGX, the value of all shares of the stocks listed in the exchange, became mere pittance.

Then suddenly, the economic reforms that Tinubu dared to set in motion started yielding dividends. Before the withdrawal of petrol subsidy, the three tiers of government were sharing N700 billion monthly from the federation account.

The withdrawal of petrol subsidy almost tripled the revenue from the federation account. The three tiers of government now share anything from N2 trillion monthly.

That empowers the federal government to embark upon massive infrastructure rehabilitation that are now creating jobs and growing the economy. In the first half of 2026, the economy grew at something pretty close to five per cent.

That is primarily because the federal government now has enough money to plough into infrastructure development to create jobs and grow the economy. The reforms have also empowered the federal government to invest in non-oil export reforms. That has resulted in a 1,407 increase in non-oil exports.

The consequence of that is the tremendous growth in the nation’s foreign exchange reserves. The reserves grew from $33 billion to $52 billion in recent weeks.The reserves can fund well over 12 months imports. 

Besides that, the CBN is now capable of allocating foreign exchange to foreign portfolio investors to repatriate the proceeds of their investment.That primarily is the reason for the massive return of foreign portfolio investors to Nigeria. 

The return of the foreign portfolio investors to Nigeria is so lucrative that last year they ploughed $20 billion into the NGX.That has kept the capitalisation of the NGX very active. 

On one frenzied day in the first quarter of 2026, the capitalisation of the NGX rose by a record N5 trillion. That is unprecedented. The growth of the capitalisation of the NGX has consequently been dynamic. From a paltry N63 trillion in the gloomy year 2023, the capitalisation of the NGX now stands menacingly at N160 trillion. 

Even the bearish posture of the market in the closing weeks of July 2026 could not really deplete the gains. It has overcome the losses and grew back to N160 trillion. 

The remarkable thing about the capitalisation of the NGX is the fact that domestic investors now control a higher percentage of the investments in the market despite the dominant role of foreign portfolio investors.

Two major factors are generally responsible for the massive invasion of the NGX by foreign portfolio. The first one is the rapid growth of the market capitalisation. That allows the investors both foreign and domestic to reap from bountiful capital gains.

The capitalisation of GTBank, a leading company quoted in the banking sector of the NGX, recorded well over N50 gains in less than three months in 2025. 

The NGX is one of the most profitable markets in the whole globe. Its annual return on investment is pretty close to 60 per cent.

Investors who are attracted by capital gains sell at that point and make their gains before dividend is declared.The second development in the market which both foreign and domestic investors cannot ignore is the fact that many of the companies listed in the NGX pay very attractive dividends.

GTBank set the record in 2025 by paying a record dividend of N12.05 per share. No one in the banking industry has paid that level of dividend before.

On its part, Dangote Cement recorded a profit after tax (PAT) of $730 million in 2025 and topped the chart with a dividend of N45 per share. No investor can resist that.