Improving macro conditions may drive Nigerian equities rally in 2026 – Bancorp MD

MANAGING Director of Bancorp Securities Limited, Mr Dolapo Ashiru, says Nigeria’s equities market could extend its strong performance into 2026 as macroeconomic conditions improve and investor confidence strengthens.

Speaking on Friday during a financial market outlook webinar themed ‘In Search of Alpha,’ Ashiru said declining inflation, improving foreign exchange stability and stronger economic growth projections are expected to support corporate earnings and equity valuations.

According to him, Nigeria’s gross domestic product (GDP) is projected to grow between 4.5 and 5 percent, a development he believes could provide a more supportive environment for the stock market.

Mr Ashiru also noted that investor participation in the market is increasing, particularly from foreign investors who had previously stayed on the sidelines. He said foreign participation in the market has risen from about 15 percent in 2024 to roughly 21 percent in 2025, adding that the trend could continue as confidence in Nigeria’s macroeconomic reforms strengthens.

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Domestic institutional investors are also expanding their exposure to equities, especially pension funds seeking higher returns in the market. Mr Ashiru said the banking sector is likely to remain a major driver of stock market performance, particularly the tier-one lenders, citing their strong balance sheets and growth prospects.

He listed GTCO, Zenith Bank, Access Holdings, First HoldCo and United Bank for Africa as institutions with solid fundamentals expected to sustain investor interest. The ongoing banking sector recapitalisation programme is also expected to boost profitability and strengthen investor appetite for banking stocks.

Beyond banking, Mr Ashiru pointed to opportunities in the telecommunications and energy sectors. He said operators such as MTN Nigeria and Airtel Africa remain attractive due to strong cash flows and dominant positions in the Nigerian market.

In the energy space, he said companies, including Seplat Energy and Aradel Holdings, could benefit from the ongoing acquisition of onshore oil assets from international oil companies exiting the country.

Political risk

However, Ashiru cautioned that political developments ahead of the 2027 general election may introduce periods of volatility in the market.

He said election cycles typically trigger cautious investor behaviour as market participants reduce risk exposure and temporarily shift to cash positions while awaiting political clarity. Mr Ashiru also expressed concern about Nigeria’s capital gains tax framework, warning that it could discourage long-term investment in equities if not structured properly.

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According to him, policymakers may need to introduce incentives that reward long-term investors and deepen participation in the capital market.

Despite these concerns, Ashiru said he remains optimistic about the country’s broader economic outlook, adding that he expects 2026 to be a strong year for the Nigerian economy.